Alcoholic beverages exports to cross $1 bn in next few years: Report

Beer, liquor , alcohol

Drakkar is known for ‘Liquid Cocaine’, an imperial IPA that originally comes from a famous Hungarian brewery called Mad Scientists.

The country’s alcoholic beverages exports are expected to cross USD 1 billion in the next few years on account of increasing demand for spirits in global markets, a senior government official said on Thursday.

As against the exports of USD 325 million in 2022-23, the outbound shipments from the sector touched USD 230 million during April-October this fiscal, Additional Secretary in the commerce ministry Rajesh Agrawal told reporters here.

The global trade of these products is about USD 130 billion.

“The demand for Indian spirits is increasing…It is expected to go beyond USD 1 billion in the next few years. Indian beverages market is growing very fast and slowly demand for these brands across the world is also picking up,” Agrawal said, adding that in the forthcoming three-day Indus Food show in Greater Noida (Uttar Pradesh), there will be a wine and spirits section.

Over 2,500 global buyers, 5,000 domestic buyers and 86 retail chains would be participating in the show apart from over 120 foreign exhibitors.

The world trade in the segment is being captured by Scotch (USD 13 billion).

When asked if free trade agreements of India will help promote these exports, he said, “This is also one of the areas where we are trying to negotiate upon…we are also trying to see the duty concessions that are required in various destinations, we get (that)”.

The condition that for a product to qualify as a whisky, it must be matured for a period not less than three years has not yet been resolved.

The Indian industry claims that because of the warm climate in India, the product matures in one year and gives the same outcome.

“The debate is still on whether we should brand it as Indian whiskey or look for a scotch (brand)…International law in many countries prohibits that (one-year thing). It is an unresolved issue,” he added.

According to the alcoholic beverages makers’ body Confederation of Indian Alcoholic Beverage Companies (CIABC), it has been highlighted several times, along with scientific substantiations, that such long maturation is not applicable under a warm Indian climate.

“We believe that it is effectively a non-tariff barrier since long maturation increases the cost of Indian products by 30-40 per cent as spirit evaporates 10-15 per cent every year under Indian climate (compared to 1-2 per cent in Europe),” CIABC Director General Vinod Giri has said.

He has also said that the cost of capital deployed during maturation in India is high (8-10 per cent per annum) as compared to 2-3 per cent for Europe.

First Published: Dec 21 2023 | 4:01 PM IST

The article discusses the expected growth of India’s alcoholic beverages exports, which are projected to cross USD 1 billion in the coming years. Currently, the sector has witnessed outbound shipments of USD 230 million during April-October of the fiscal year, compared to exports of USD 325 million in the previous year. The global trade of alcoholic beverages stands at approximately USD 130 billion. The increasing demand for Indian spirits in international markets is seen as a key driver for this growth. The article also mentions that the forthcoming Indus Food show in Greater Noida will have a dedicated section for wine and spirits, attracting over 2,500 global buyers and 5,000 domestic buyers. However, there are unresolved issues regarding the labeling of Indian whiskey and its maturation period, with Indian industry players arguing that the warm climate accelerates the maturation process. The Confederation of Indian Alcoholic Beverage Companies (CIABC) asserts that the long maturation period requirement increases costs for Indian products.

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