India's alcohol exports to hit $1 billion on spirited global appetite

India's alcoholic beverages exports are anticipated to surpass $1 billion in the coming years due to the growing global demand for spirits, as stated by Rajesh Agrawal, Additional Secretary in the commerce ministry. Despite recording exports of $325 million in 2022-23, the sector saw outbound shipments of $230 million from April to October this fiscal year. 

Agrawal highlighted the rapid growth of the Indian beverages market and the increasing global demand for Indian spirits. The Indus Food show in Greater Noida will feature a dedicated section for wine and spirits, with participation from over 2,500 global buyers, 5,000 domestic buyers, and 86 retail chains.

Maturation dilemma

The ongoing debate regarding the maturation period for whisky in India remains unresolved. While the Indian industry argues that the warm climate enables one-year maturation with comparable results, international laws in many countries insist on a minimum three-year maturation period for a product to be classified as whisky. Agrawal mentioned ongoing negotiations and efforts to secure duty concessions in various destinations to promote exports. 

The Confederation of Indian Alcoholic Beverage Companies (CIABC) has emphasised that the extended maturation period constitutes a non-tariff barrier, increasing the cost of Indian products by 30 per cent to 40 per cent due to higher spirit evaporation rates and elevated capital deployment costs during maturation in India compared to Europe.