Luxury spirits are emerging as one of the few bright spots in India's slowing alcohol market, as liquor makers and importers bet affluent consumers will continue to trade up.
Over the past few months, companies including Diageo India, Allied Blenders & Distillers (ABD), Radico Khaitan, Tilaknagar Industries, Alcobrew Distilleries, as well as independent Scotch bottlers and importers, have launched—or outlined plans to launch—premium single malts, tequila, Scotch whiskies and imported wines priced from about ₹3,500 to as much as ₹27,500 a bottle.
The strategy reflects a broader shift in the industry. With overall spirits consumption growing modestly, companies are increasingly chasing higher-value sales rather than higher volumes.
While overall spirits volumes grew at a compound annual growth rate (CAGR) of 3% between 2019 and 2025, premium spirits expanded 22%, ultra-premium 23%, prestige 31% and prestige plus 53%, according to London-based drinks consultancy IWSR.
Industry estimates suggest India consumes about 440 million cases of spirits annually. Premium-and-above brands now account for about 43% of the market by volume. The premium segment, comprising brands priced around ₹1,000-1,500, accounts for roughly 120 million cases a year, while prestige and luxury brands together have grown to about 10 million cases and continue to expand at a double-digit pace.
Trading up
Companies say rising disposable incomes, changing aspirations and higher at-home consumption are encouraging consumers to spend more on premium alcohol even as overall drinking levels remain relatively stable.
"Premiumization, in breadth and scale, is a key trend for whisky, but it is also opening the way for consumers to behave similarly with other categories," Jason Holway, senior consultant at IWSR, told Mint. Imported categories such as tequila are seeing a greater skew towards premium products, while gin continues to benefit from the growth of cocktail culture, he added.
Industry executives said the shift is being driven less by higher alcohol consumption than by consumers buying more expensive bottles.
“The consumer is choosing to drink better, even if they drink less,” said Amar Sinha, managing director at Allied Blenders & Distillers Ltd.
Sinha said the ₹5,000-10,000 price band has emerged as an affordable luxury segment as rising disposable incomes, changing aspirations and higher at-home consumption encourage consumers to spend more on premium bottles. The company plans to introduce one whisky in that segment as part of its strategy to improve realizations.
Diageo India is making a similar bet, expanding brands such as Godawan and Don Julio while introducing limited editions, bespoke whisky programmes and luxury experiences.
"It is a low-volume, high-value play, but more importantly it is a growth play," said Amitabh Pande, chief strategy officer at Diageo India. Luxury spirits posted a value CAGR of 16% between 2022 and 2025 and 29% over the past five years, he said, adding that the segment remains at least a decade away from saturation as consumers increasingly seek personalized products and limited editions.
Independent bottler Isthmus 44 is also betting that consumers will increasingly look beyond established distillery brands in search of rarity and provenance. Founder Sachin Uppal said demand is shifting towards single-cask expressions and independent bottlings.
Premium push
Established liquor companies are broadening their luxury portfolios.
In May, Radico Khaitan, maker of Magic Moments vodka, said innovation remained a key growth driver in FY26, particularly in the luxury segment. Its luxury portfolio, led by Rampur Indian single malt, Jaisalmer Indian craft gin and Royal Ranthambore whisky, recorded sales worth ₹475 crore, and the company said it would continue to focus on premium brands, up from ₹340 crore in FY25.
Tilaknagar Industries has also outlined plans to deepen its presence in the luxury segment. In its recent earnings call, the company said Seven Islands pure malt whisky will expand to more than 10 states in FY27, alongside a wider rollout of brands including Monarch Legacy Edition Brandy and Samsara gin.
Management said it had recently built a dedicated team to drive its luxury business, describing the segment as an area of "immense importance" with significant growth ambitions.
The premium push is extending beyond spirits. Tandon Enterprises has expanded its Italian wine portfolio with 12 premium and luxury labels priced between ₹3,500 and ₹10,000 after seeing stronger demand from distributors.
"The premium wines and spirits segment in India is witnessing strong momentum as consumers increasingly prioritize quality, authenticity and craftsmanship over volume," said Pratul Tandon, partner at Tandon Enterprises.
Executives expect the next phase of growth to come not just from new product launches, but also from limited editions, bespoke bottlings and curated experiences.
“India, over the next five to 10 years, will be one of the largest premium whisky markets in the world,” Sinha said.