Coherent Market Insights

India Gin Market to Surpass US$ 2,710.9 Mn by 2031

India Gin Market to Surpass US$ 2,710.9 Mn by 2031 - Coherent Market Insights

Publish In: Jun 17, 2024

Market is Estimated to Witness High Growth Owing to Rising Disposable Incomes & Increasing Social Drink Culture

The India gin market is estimated to be valued at USD 1,666.3 million in 2024, exhibiting a CAGR of 7.2% over the forecast period (2024-2031). The Indian premium spirits market has witnessed significant growth over the past few years owing to rising disposable incomes and changing consumer preferences towards premium alcoholic beverages. Furthermore, the influence of western culture and increasing socialization at pubs, bars, and clubs has boosted the growth of gin consumption in India.

The India gin market is primarily driven by two key factors. Firstly, rising disposable incomes among urban consumers belonging to the middle and upper-middle-income groups have increased their spending power on premium drinks. Secondly, changing social trends such as growth in nightlife destinations and pub culture have made gin a popular beverage for socialization. Premium gin brands are capitalizing on these opportunities by launching extensive marketing campaigns promoting responsible drinking as well as innovative flavors targeting young consumers. However, stringent regulations and taxes imposed on alcoholic beverages continue to hamper the market growth to some extent.

Growing Popularity of Premium Alcoholic Beverages is Driving the India Gin Market

The rising popularity of premium alcoholic beverages such as gin among young urban professionals in India is one of the key drivers for the growth of the India gin market. With increasing disposable incomes and exposure to global trends, many young Indians are willing to experiment and spend more on premium alcoholic drinks. The social status associated with consuming gin is also attracting young consumers. Several craft gin brands are entering the premium segment and launching flavorful varieties with unique botanicals which is finding favor among novelty-seeking consumers. The attractive packaging and marketing of gin products place them as aspirational luxury items used for socializing and unwinding.

Relaxation of Laws on Alcohol Consumption is Widening the Addressable Market

Many states in India have relaxed regulations regarding the consumption and sale of alcohol in recent years. This is expanding the legal addressable market potential for gin producers. Previously, alcohol sales were restricted to licensed shops and consumption in public places was banned in several states. But now, many big hotels, pubs, and bars allow alcohol serving and consumers can openly purchase alcohol from retail shops. The reduced stigma around alcohol intake in peer groups and growing nightlife scenes in major cities have encouraged more social and occasional drinking. This favorable regulatory environment provides opportunities for new brands to promote and expand their availability across modern trade outlets.

High Taxes on Premium Alcohol Keep Prices Elevated

One of the key restraints for the India gin market's growth is the high taxes imposed by various states on the production and sale of premium alcoholic beverages. Gin comes under the highest taxation slab for alcoholic drinks due to its premium image. Some states additionally levy luxury/sin taxes that increase the final retail prices substantially. This pricing acts as a deterrent for many potential consumers to regularly purchase gin despite being attracted to it. High prices strengthen perceptions that gin is only for high-income groups or occasional consumption at luxury hotels and bars. Reduced affordability deters volume sales and regular usage of gin at home parties and social gatherings.

Limited Local Production Infrastructure Hinders Market Development

The lack of large-scale local manufacturing capacities for gin restricts the India gin market from reaching its full potential. Most gin sold in the country is imported as bulk ethanol or bottled products owing to limited distilling and bottling infrastructure indigenously. While craft distillers are emerging, production volumes remain quite low. Importing also makes gin vulnerable to currency fluctuations and supply chain disruptions during periods like the pandemic. Focused efforts are needed to incentivize and facilitate setting up of more bulk distillation units with gin-making capabilities inside India. This will help reduce reliance on imports and prices in the long run benefiting consumers.

Emergence of Craft Distilleries is Opening New Growth Avenues

The rise of small-batch craft distilleries experimenting with Indian botanicals provides opportunities for the unique positioning and marketing of India gin offerings. Craft producers are indigenizing gin recipes exploring local herbs and spices to formulate artisanal styles. This appeals to a niche but influential set exploring regional authentic products and experiences. Craft gin brands dominate awareness and trials at premium bars and restaurants driving subsequent household purchases. Their innovativeness across flavors also encourages multi-bottle purchases and repeat buying. The craft distilling trend enables developing a distinctive India gin market less reliant on international labels. It aids the development of a passionate consumer base willing to pay more for quality stories and exotic tastes.

Online Retail Expansion Improves Access across Cities

The rapid scaling up of online liquor sales in India due to the pandemic has opened new market potential for gin producers. Several states allowed home delivery of alcohol through regulated online platforms during lockdowns breaking the in-store limitation. This helps reach consumers pan-India including those beyond main metropolitan areas. The digital experience of browsing diverse brands and adding products to virtual carts improves awareness and trial rates especially for imported global labels. The data collected also aids targeted promotion and innovative bundling offers. E-retail complements the modern trade network to drive demand from Tier II cities and sub-urban neighborhoods outside the reach of premium bars.


Key Developments

  • In January 2024, Allied Blenders and Distillers Limited (ABDL) announced the launch of ZOYA Special Batch Gin, a new addition to its portfolio of premium spirits.
  • In 2023, Diageo India, a leading spirits company, launched two brand-new gin variants, expanding its portfolio of premium spirits.
  • In 2023, Radico Khaitan, a leading spirits company, launched a new distilled gin collection called 'Happiness in a Bottle: A Happily Crafted Gin'.
  • In 2023, Himmaleh Spirits, a leading spirits company, launched Kumaon & I, India's first provincial dry gin.

Key Players

United Spirits Limited, Tilaknagar Industries Limited, Deejay Distilleries Private Limited, SNHL India Private Limited, Jagatjit Industries Limited, Mohan Meakin Limited, Radico Khaitan Limited, Globus Spirits Limited, Allied Blenders and Distillers Pvt., SAB Millier, Khemani Group, SOM Distilleries and Breweries, Amrut Distilleries, Amber Distilleries Limited, Jaisalmer Indian Craft Gin, Terai India Dry Gin, NAO Spirits, Fullarton Distilleries, and Tanqueray

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