India is the third largest global spirits market by volume in the world, just behind China and Russia.

It
is also one of the fastest growing markets in the world. The domestic alcohol industry has recognized
that the young people and women are the key target populations for them and they are assertively
focusing on these vulnerable groups through their marketing campaigns. India is one of the worlds
most restrictive places.

India is one of the worlds most restrictive places for trade and doing business. In 2014, it is ranked
110 out of 152 countries, in terms of economic freedom, by the Economic Freedom of the World
Report. Its Freedom to Trade Index was 6.2 (highest score 10.0), 124 Doing business in India remains
difficult for both foreign and domestic companies. The country was ranked 133 out of 152 countries
by the World Bank this year in its Doing Business Score. Many studies have indicated trade barriers
continue to be a major hindrance to Indias development and prosperity, making trade liberalization
and further deregulation critical to its economy.

Spirits imports to India for select brands (2014, litres)

Absolut 695,178
Thank you for your interest this content is no longer available. Please visit www.theiwsr.com for
Alcazar further information. 181,896
Blue Riband 164,769
Fuel 217,790
Finlandia 287,145

The industry is consistently launching new products, such as flavoured alcoholic drinks, to attract the
nondrinkers in this group.The availability of alcohol is increasing in India; there are more outlets in
shopping malls and popular market places, which make it easily accessible. In some states, certain
alcoholic beverages like wine and beer can be sold in supermarkets that further increase the
availability. Increase in physical availability of alcohol leads to rise in alcohol consumption and
alcohol related harm. Intensive engagement of the alcohol industry is observed in social initiatives
and policy related activities under the broad framework of corporate social responsibility (CSR),
which now-a-days are part of a more general strategy that is designed to further the industrys
political and economic interests. The Indian alcohol industry is a high-risk industry, on account of the
high taxes and innumerable regulations governing it. The international liquor industry, the Indian one
too has seen players with strong brands; diversified portfolios and large operations achieve market
leadership positions. The Indian liquor industry comprises the IMFL, country liquor, foreign liquor
bottled in origin (BIO), illicit alcohol, beer and wine segments. Indian made foreign liquor : The
maximum permissible limit for alcohol content in spirits is 42.8 per cent v/v (volume to volume). The
overall IMFL market is increasing at the rate of 9 to 10 per cent annually and growth rate of 11.9 per
cent in the last financial year (2011-12). There is a tremendous growth in the vodka market. It is the
fastest growing among all types of liquors. Vodka consumption has been growing at the rate of about
44 per cent over the past few years. Country liquor : The average alcohol content in country liquor is
33 per cent volume to volume. It is produced in local licensed distilleries and is made of cheap raw
material, primarily rectified spirits of grains or molasses. In the southern states coconut and other
palms are used as raw materials in the production of local liquor. It is called as arrack, desi sharaab,
daru, tharra, toddy, fenny and tari. The production cost for country liquor is low; the excise duties
are also lower than they are for other liquor. The idea behind country liquor was to provide cheap
alcohol and thus check the illicit trade of alcohol.

Beer : Beer has become a popular beverage in the country only over the last two decades. Its
growing at a rate of about 17 per cent per year. In India, beer is manufactured in licensed breweries
and there are more than 60 beer brands available in the market. The growth in the beer market
appears to be driven by young consumers and professionals who consider beer a trendy drink, as
compared with traditional spirits. There is also a small demand for foreign beer in the up market
urban areas. The highest levels of beer consumption in India are observed in the southern states.
Foreign liquor bottled in origin (BIO) : Imported liquor forms a very small part of alcohol
consumption in India. It is usually consumed by the rich and upper middle class in metropolitan
cities. It is also subjected to customs duty, making it much more expensive. The imported spirits
market in India is growing at the rate of 25 per cent annually.

Wine : Wine is an alcoholic beverage made from fermented fruit juice, usually that of grapes. Wines
made from other fruits are usually named after the fruit from which they are produced (for example,
apple wine or elderberry wine) and are generically called fruit wine. The term wine can also refer
to the higher alcohol content of starch-fermented or fortified beverages such as barley wine, sake,
and ginger wine.

Illicit alcohol : The alcohol produced illegally is called illicit alcohol. They do not follow any set
standards and thus have no quality control. The alcohol produced from these units is usually
adulterated and may contain a highly fatal substance called methylated spirit or methanol. This
added methylated spirit can lead to death or blindness. Illicit alcohol also evades all national and
state-level taxes and duties, thus making it very cheap and affordable.

The liquor market in India : South India dominates the alcohol market in India, with that region
accounting for about 60 per cent of total IMFL sales and 45 per cent of total beer sales. Globally,
most spirits are derived from grains and other raw materials may include potatoes, sugarcane, and
fruit spirit. However, in India, the most common raw material is molasses, a derivative of sugarcane.
Some Indian alcohol industries are gradually introducing grain-based spirits. The consumption of
spirits and hard liquor accounts