India’s drinking habits are changing, driven by rising incomes and more relaxed attitudes, with the spirits sector forecast to grow rapidly in the short term and with both global and local brands cashing in.

For many years, drinking was either banned – it still is in three states – or it was just plain taboo. Now, as incomes in the country rise and more consumers can stomach the high rate of tax on spirits – up to 200% in some states for local versions of foreign brands and 150% for imports – sales of liquor are on the rise.

India’s spirit sector is forecast to expand by 25% to $41 billion over the next three years, according to Euromonitor International. Pernod reported 24% growth in the country last quarter, with its Scotch brands most responsible for the growth. Rival Diageo reported 12% growth, with premium brands such as Johnnie Walker whisky leading the way.

There is also a changing attitude towards women drinking, the Economic Times reports. And that growing acceptance, in particular, is helping to boost sales of white spirits like gin and vodka where once whisky was the go-to spirit.

One of the country’s oldest distillers, Radico Khaitan, which produces a market-leading vodka, Magic Moments, says growth is fundamentally being driven by the rising affluence of India’s middle class.

Company MD Abhishek Khaitan told Bloomberg recently that after three years of no growth and sales restrictions, the sector is on the up. Consumers are not only drinking more, he said, they are going for the premium end of the spirits market.

The trend will continue to be driven by urban households with twin incomes, Khaitan believes, as consumers follow the eating and drinking out habits of their peers overseas.

“There’s a cultural change happening,” he said. “Most importantly, the middle class is emerging in India and premiumisation is happening.”

The view is reinforced by analysis of a specific slice of the sector, one that has enjoyed big growth in the West: the gin market. Future Market Insights’ (FMI) report, says growth is down to changing attitudes, and a growing, more affluent urban population. The gin market, in particular, is being fuelled by the increasing popularity of a bar and cocktail culture in cities. In Eastern India, it forecasts volume share growth from 12.5% in 2015 to 12.9% in 2025.

And as the taste for spirits grows, so too does the thirst for novelty. Scottish whisky brand Glenfiddich recently unveiled its “Glenfiddich Experiments”, the result of a collaboration with domestic company Malabar Secrets. The new drink is essentially whisky infused with iconic Indian ingredients such as jasmine, cloves and black pepper.

Sourced from Economic Times, Bloomberg, FMI; additional content by WARC staff