Beer Market for Strong Growth

The Indian beer market is forecast to expand robustly through 2026 and beyond, with several industry reports projecting strong double-digit to high single-digit annual growth overall. A recent forecast shows continued growth expected across 2026–2035 at an approximate CAGR of around 9.9 percent in some projections. Another analysis projects the India beer market to grow from approximately USD 14.8 billion in 2025 to USD 28.4 billion by 2033 at around 8.6 percent CAGR, implying strong momentum that includes 2026. Behind these headline numbers lie shifting consumer tastes, rising premiumisation, the rapid ascent of low and no alcohol options, and policy moves that are already nudging access. JAIKISHAN Pati, Chairman of the All India Brewers’ Association, unpacks these trends and the policy choices that could shape the next chapter for beer in India.

The year 2025 proved to be a mixed one for the beer category, shaped by a combination of external headwinds like rising input costs and some positive reforms in state-level policy frameworks. From a demand perspective, beer consumption remains inherently seasonal and sensitive to weather patterns. The unusually prolonged monsoons and colder than normal winter conditions in 2025 led to temporary demand softness and some supply-planning disruptions. Importantly, these effects were cyclical rather than structural, and do not detract from the category’s longer-term growth drivers.

“Where states have undertaken thoughtful tax reforms, particularly by moving towards duty parity between IMFL and beer, relative affordability has improved, helping sustain consumer demand,” says Jaikishan. Recent policy shifts in states like Maharashtra, Meghalaya and West Bengal towards more rational, alcohol content based excise structures are encouraging signals, with the states reaping benefits on both social and revenue fronts, he observes.

Opportunities & Priorities

Moving into 2026, the tax reforms reflect a balanced approach that supports consumer accessibility while fostering a healthier and more sustainable category. They also offer valuable templates for other states to consider. On the demand side, the category is witnessing structurally positive trends. Steady premiumisation and an increasing consumer preference for sessionable, higher-quality beers underscore a maturing market. “Beer, by its very nature, promotes moderation, and these evolving consumption patterns reinforce its role in responsible drinking while supporting long-term category growth,” Jaikishan says.

The outlook for the category remains positive, supported by progressive policy developments in several key states, with others expected to follow with necessary reforms. Perhaps the most under-appreciated success story is the beer ecosystem taking shape in Uttar Pradesh, driven by sustained and progressive policy reforms. “The emergence of greenfield breweries, a growing packaging ecosystem and the potential development of a malting industry together represent an investment pipeline exceeding ₹5,000 crore,” Jaikishan points out.

This transformation powerfully illustrates the economic multiplier effect the beer category can deliver and serves as a compelling model for other states seeking investment, employment generation and long-term industrial growth. “We are optimistic that markets such as Delhi, Uttar Pradesh, Rajasthan, West Bengal and the NorthEast will witness meaningful progress in shaping the category, driven by proposed measures aimed at creating a more equitable and balanced policy framework,” Jaikishan forecasts.

With consumers increasingly embracing low and no-alcohol alternatives, the 0.0 beer segment is also expected to sustain its strong double-digit growth trajectory. While affordability continues to be a consideration for beer consumers, the premiumisation trend is expected to persist, presenting a significant opportunity that brewers are keen to capitalise on. In terms of challenges, foremost will be the availability of packaging material, particularly cans, where supply has not kept pace with the rapidly growing consumer preference.

“We are actively engaging with the relevant authorities to work towards a sustainable, long-term solution to address this constraint,” Jaikishan informs. A key regulatory consideration for the brewing industry remains the ability to undertake timely price revisions in the face of rising commodity inflation. As states adopt a more stringent approach to price adjustments, the industry faces pressure when economies of scale are impacted by declining volumes. Brewers are constructively engaging with state governments to streamline inflationlinked pricing mechanisms and have already seen encouraging progress in a few states.

AIBA’s 3 Pillar Approach

The beer category in India, which is severely under-penetrated, has indeed gone through a challenging phase, driven by policy volatility, pricing constraints, input cost inflation and uneven market access across states. However, 2026 represents a pivotal opportunity to reset the narrative and rebuild the category on a more sustainable and growthoriented footing. AIBA’s approach to supporting healthy growth will focus on three key pillars. First, strengthening policy advocacy through a unified industry voice to push for predictable, transparent and equitable excise frameworks.

This includes advocating for inflationlinked pricing mechanisms, rational licence structures and differentiated treatment for beer vis-à-vis highalcohol spirits, recognising beer’s lower alcohol content and socio-economic footprint. Second, enabling category expansion by working closely with state governments to unlock growth in under-penetrated markets, encourage responsible consumption and support reforms such as product differentiation, low- and no-alcohol beer policies and modern retail formats. “These measures can meaningfully expand the consumer base while aligning with public health and revenue objectives,” Jaikishan adds.

Third, improving industry collaboration to address common structural challenges like packaging availability, supply-chain efficiencies and sustainability initiatives. By collectively engaging with policymakers and ecosystem partners, the industry can drive large scale efficiencies that benefit all players.

In terms of bringing more players, especially emerging and new beer companies, into the group, the focus will be on building an inclusive, collaborative platform that represents diverse business models, from large brewers to craft and regional players, and even packaging and malting partners. “This includes lowering participation barriers, ensuring balanced representation in discussions and creating dedicated forums to address the unique challenges faced by newer entrants,” Jaikishan elaborates. A stronger, more representative beer community will enhance credibility with regulators and enable more effective advocacy for the category as a whole.

Overall, the objective is to move from a fragmented, reactive approach to a coordinated, solutions-oriented industry engagement that supports ong-term, responsible growth of the beer category in India.

What the Industry Wants?

As excise is a state subject, excise departments across the states have the primary ability to meaningfully shape the beer category at the state level. While the central government, through business reforms and ‘ease of doing business’ initiatives, continues to strengthen India’s position as an attractive and export-friendly market for the alcoholic beverage industry, with positive macroeconomic indicators supporting rising disposable incomes, the role of the states in enabling balanced category growth remains critical.

“State excise policies should be viewed not only through a commercial lens but also from a broader publichealth, social and economic perspective. In this context, we seek to engage constructively with state governments on adopting a ‘risk-per-litre’ or alcohol content-linked taxation framework, which would help bring greater parity and rationality to the tax structure. Beer, by virtue of its low alcohol by volume (ABV), is inherently a more responsible choice, and policy frameworks should reflect this distinction,” Jaikishan says.

Providing appropriate retail access through progressive retail reforms is equally important to unlock the category’s true potential. “Treating beer as part of a homogeneous ‘alcoholic booze’ category, without recognising differences in alcohol strength and consumption patterns, limits growth and does not align with public-health objectives,” Jaikishan says. Encouragingly, the segment is beginning to see green shoots in the evolving approach of several states like Maharashtra, West Bengal and Meghalaya. The focus will be on building this momentum through continued dialogue and evidencebased advocacy.

A more differentiated and balanced policy approach, one that taxes what causes greater harm while incentivising responsible choices, can help nudge consumers towards moderate consumption, support public health goals and drive sustainable economic outcomes for the states.