While the world nursed a hangover, India ordered another round

India's alcohol consumption is growing at a pace that few major markets can match. Volumes jumped 10% in the first half of 2026, even as global consumption declined and the US and China, the world's two biggest alcohol markets, recorded drops of 4% and 3% respectively, as per a recent TOI report. India was the only one of 21 markets tracked by drinks research firm IWSR (International Wine and Spirits Record) to report growth across every beverage category and subcategory. The surge is not confined to whisky or beer. Indians are drinking more vodka, gin, wine and ready-to-drink cocktails, while even non-alcoholic beer is expanding faster than any major alcoholic category.

The numbers, shared exclusively with TOI by IWSR, point to a market undergoing a significant consumption shift. They also underline India's growing importance to global drinks companies at a time when growth is becoming harder to find in established markets.

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The US and China sober up, but India still got the bottle

Alcohol consumption across 21 major markets, accounting for 76% of global beverage alcohol volumes, declined 1% in January-June 2026, as per IWSR. The US was down 4% and China 3%. India, meanwhile, grew 10%, comfortably ahead of Colombia (9%), South Africa (5%) and Brazil (3%). Even more telling, India was the only market to record growth across every category and subcategory tracked by the research firm.

Beer was the biggest alcoholic beverage growth engine, with full-strength volumes rising 16%. Ready-to-drink beverages grew 12%, blended Scotch 8%, vodka and gin 6% each and Indian whisky 4%. Rum and non-Cognac brandy expanded 3% apiece while still wine grew 2%. Fortified wine was up 7%.

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No-alcohol beer, however, stole the show with a 25% jump, against 8% growth across the 21 markets.

The breadth of this expansion suggests something more fundamental than a temporary sales recovery. India is adding drinkers while existing consumers are also broadening their choices and trading up.

Gen Z is joining the party

Demographics offer perhaps the biggest explanation for strong liquor consumption trend. India has a large population entering legal drinking age every year, giving the industry a steady stream of potential new consumers. This is significant when compared with mature markets where population growth is slower and drinking habits are already well established.

The proportion of Gen Z consumers aged 21-28 who drink alcohol climbed to 80% in March 2026, from 70% a year earlier and 60% in 2023, ET reported in July, citing exclusive India data from IWSR's Bevtrac survey.

This challenges the popular global narrative that younger consumers are abandoning alcohol. IWSR president Marten Lodewijks told ET that the moderation narrative around Gen Z in India was being disproved by the data. Allied Blenders and Distilleries managing director Amar Sinha also attributed much of the industry's expansion to younger consumers entering the category.

The preferences of Gen Z are different, though. ET reported that younger drinkers are exploring vodka, tequila and international spirits while older consumers continue to favour traditional categories such as whisky. Experiences at bars and restaurants are becoming important occasions for discovering new brands and drinks.

Rising incomes are changing what Indians drink

Economic growth and rising disposable incomes are making premium beverages more accessible to a larger consumer base. Urbanisation is adding to this shift as organised retail, restaurants, bars and modern drinking formats expand.

Euromonitor's September 2026 assessment of India's alcoholic drinks market identifies favourable demographics, rapid urbanisation and a growing number of new legal-age consumers as important growth drivers. It also points to rising incomes and the growing appeal of premium and craft products.

Beer is benefiting from a change in economics

Beer has emerged as one of the biggest beneficiaries of changing consumer preferences and state taxation policies. ET reported in September that beer volumes jumped 17% nationally in the June quarter, compared with just 2% growth in spirits. Maharashtra, Karnataka, Odisha and West Bengal had raised taxes on Indian-made foreign liquor while keeping beer prices unchanged or reducing them in some cases.

The resulting price differential encouraged consumers to shift towards beer. Brewers Association of India representatives also attributed the growth to excise policy interventions favouring milder alcoholic beverages. The latest IWSR figures reported by TOI reinforce this trend, with full-strength beer consumption up 16% in the first half of 2026.

ICRA's September industry assessment said Indian spirits volumes had declined around 3% in FY26 after falling 2% in FY25, largely because of excise-led price increases and inflation. Beer volumes, in contrast, grew around 8%. ICRA expects beer volumes to expand 5-7% in FY27, while spirits volumes could contract 4-6%. Its assessment also highlights the continuing shift towards premium spirits even as mass-market demand remains weak. Q2 results have shown liquor companies reporting higher trends for premium segments than mass-market ones.

India is still a relatively underpenetrated market

Another important factor is the considerable headroom for growth. Alcohol consumption in India remains low on a per-capita basis compared with several established markets. A relatively small increase in the number of regular consumers or drinking occasions can therefore translate into substantial percentage growth.

This becomes an important factor when comparing India with the US and China. Both are enormous markets with established consumption patterns. Their current declines reflect moderation, economic pressures and changing consumer behaviour. India's growth is being driven partly by the expansion of the consumer base itself.

The global slowdown also has a different set of triggers. IWSR told TOI that moderation trends and the growing use of GLP-1 weight-loss drugs were weighing on consumption. Inflation, tariffs and economic uncertainty were affecting American consumers while China's slowing economy and structural challenges were hurting demand.

Though inflation appears to be currently impacting mass-market segments in India too, the country is at a different stage of market development. Its young population and expanding middle-income consumer base provide a growth pipeline that mature markets do not have to the same extent.

Why non-alcoholic beer is growing even faster

The 25% jump in no-alcohol beer is a notable trend. It may appear contradictory that a country drinking more alcohol is also seeing its fastest growth in a product without alcohol, but the two trends can coexist.

For younger consumers, social drinking is increasingly about participating in occasions rather than necessarily getting intoxicated. Non-alcoholic beer allows them to retain the familiar taste and social ritual while avoiding alcohol. It also appeals to people who need to drive, have work commitments or want to alternate between alcoholic and non-alcoholic drinks.

Alcohol-free beer accounted for around 80% of India's still-nascent zero-proof category, as per media report a few months ago. As per industry participants, consumers increasingly want to remain part of social occasions without drinking alcohol. However, as per that media report, zero-proof beverages accounted for well under 1% of India's alcoholic beverages market by value.

A 25% increase from this small base does not yet make non-alcoholic beer a major volume contributor, but the direction is significant. India is not merely adding more conventional drinkers but also creating room for new drinking occasions and products that accommodate moderation. That could make the market attractive to global beverage companies long after the current consumption boom runs its course.