Arielle Cruz
Alcohol consumption in India has been on the rise, with one in seven Indians in the 10-75 age group consuming alcohol, according to a 2019 government survey. India is a significant player in the global alcohol market, ranking as the ninth-largest consumer and the second-largest consumer of spirits, after China. While the per capita alcohol consumption in India was 5.7 litres a year in 2016, the total alcohol consumption has risen to over 663 million litres, an 11% increase since 2017. Various factors, such as rapid urbanisation, rising income, and changing attitudes, have contributed to this growth. When it comes to the states with the highest alcohol consumption in India, sources indicate that Arunachal Pradesh has the highest proportion of drinkers among both men (53%) and women (24%). Additionally, Andhra Pradesh and Telangana have the highest average annual per capita consumption expenditure on alcohol.
| Characteristics | Values |
|---|---|
| State with the highest average annual per capita consumption expenditure on alcohol | Andhra Pradesh and Telangana |
| State with the highest average annual per capita consumption expenditure on alcohol (2022-23 prices) | Telangana |
| Lowest tax-collecting state on alcoholic beverages | Jharkhand |
| Highest tax-collecting state on alcoholic beverages | Goa |
| State with the highest proportion of men consuming alcohol | Arunachal Pradesh |
| State with the second-highest proportion of men consuming alcohol | Telangana |
| State with the highest proportion of women consuming alcohol | Arunachal Pradesh |
| State with the second-highest proportion of women consuming alcohol | Sikkim |
| India's rank in global alcohol consumption | Ninth-largest consumer overall |
| India's rank in global spirits consumption | Second-largest consumer |
| India's rank in global whiskey consumption | Largest consumer |
| Total alcohol consumption in India | Over 663 million liters |
| Per capita consumption of (pure) alcohol in India (as of 2016) | 5.7 litres per year |
| Total consumption of alcohol in India (considering only drinkers) | 14.6 litres per year |
| Percentage of women aged 15 and over consuming alcohol in India | 1% |
| Percentage of men aged 15 and over consuming alcohol in India | 19% |
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What You'll Learn
Arunachal Pradesh: highest alcohol consumption
Alcohol consumption in India has been rising over the last three decades, with the country's alcohol market set to grow by 7% annually in the 2021-25 period. One in seven Indians aged 10-75 consumes alcohol, with men out-drinking women. The per capita consumption of pure alcohol in India was 5.7 litres a year in 2016, up from 4.3 litres in 2010 and 2.4 litres in 2005.
Arunachal Pradesh, a northeastern state in India, has the highest proportion of alcohol consumers among both men (53%) and women (24%). The state's alcohol consumption can be attributed to various factors, including rising disposable income, a growing urban population, and increased access and advertising. Arunachal Pradesh's high alcohol consumption is notable, especially when compared to other states in India.
The consumption of alcohol in Arunachal Pradesh is influenced by various cultural and social factors. Historically, alcohol consumption in India dates back to the Vedic age, and it has been associated with Hindu mythology and various ruling civilizations. The licensing and availability of alcohol also play a role in consumption patterns, with the state governments regulating the granting of licenses for public welfare. Arunachal Pradesh's rural areas, in particular, have been found to have higher alcohol consumption than urban areas, a trend observed across multiple states in India.
The state's expenditure on alcohol is also noteworthy. While Andhra Pradesh and Telangana have the highest average annual per capita consumption expenditure on alcohol across India, Arunachal Pradesh's high consumption rates suggest significant spending on alcoholic beverages. The state excise collections as a percentage of consumption have been increasing, indicating a rise in state revenue from alcohol sales.
While Arunachal Pradesh has the highest alcohol consumption in India, it is essential to address the potential negative consequences. Alcohol abuse and drink-driving are prevalent issues in India, with Bollywood actor Salman Khan accused of the latter. The legal drinking age and laws regulating alcohol sale and consumption vary, and effective enforcement of these regulations is crucial to mitigate the harmful effects of alcohol abuse.
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Andhra Pradesh: highest average annual per capita consumption expenditure
Alcohol consumption in India has been on the rise. A 2019 government survey found that one in seven Indians in the 10-75 age group consumes alcohol. While alcohol consumption is generally higher in rural India than in urban areas, a few states and union territories, such as Andhra Pradesh, Bihar, Goa, and Kerala, have higher per capita alcohol expenditure in rural areas.
Andhra Pradesh, a state in southern India, has the second-highest average annual per capita consumption expenditure on alcoholic beverages among Indian states. A study by the National Institute of Public Finance and Policy (NIPFP) found that households in Andhra Pradesh spent an average of Rs. 1,306 per capita on alcohol. This figure is calculated by dividing the state's total liquor expenditure by its population.
The economy of Andhra Pradesh is primarily dependent on agriculture, which employs 62% of its population directly or indirectly. The state has seen a steady increase in the area and production of fruits and vegetables, with horticulture contributing approximately 16.07% to the state's Gross Value Added (GVA). Andhra Pradesh has also witnessed a shift towards higher-returning horticulture crops, which offer greater income assurance to farmers due to their climate resilience.
The state's per capita income has been increasing over the years, with a growth of 11.17% between 2019-20 and 2020-21. In 2023-24, the per capita income figure stood at ₹2,37,951. Andhra Pradesh's software industry is spread across various cities, including Visakhapatnam, Tirupati, and the capital city of Vijayawada. The state government has also been focusing on developing large-scale infrastructure projects and promoting the IT and electronics sectors.
In summary, Andhra Pradesh has the second-highest average annual per capita consumption expenditure on alcohol in India, with a spending of Rs. 1,306 per person. The state's economy relies heavily on agriculture, but there is a growing focus on horticulture and increasing per capita income. Andhra Pradesh is also developing its software industry and undertaking significant infrastructure projects to enhance its economic prospects.
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Alcohol tax: lowest in Jharkhand, highest in Goa
Alcohol consumption in India is influenced by various factors such as rapid urbanisation, rising income, easy availability, and changing attitudes. India's high spirits make it the third-largest market for alcoholic beverages in the world, with an estimated value of $35 billion. While alcohol consumption is prevalent in the country, there are variations in tax rates from state to state.
According to a working paper titled "Revenue Mobilisation from Taxes on Alcoholic Beverages" by the NIPFP, Jharkhand had the lowest tax collection rate on alcoholic beverages at 67%, while Goa had the highest at 722%. The study assessed data on household consumption expenditure and estimates based on surveys conducted between 2014-15 and 2022-23.
The disparity in tax rates reflects the differing priorities of local governments, cultural attitudes, and public health goals across Indian states. Alcohol taxation plays a significant role in the nation's alcohol regulatory network and can be used as a strategy to reduce overall state consumption or to ensure affordability and market access.
Some states with notable alcohol consumption and tax rates include Maharashtra, which has moderate taxes and a thriving alcohol market in Mumbai, its capital. Haryana has seen an increase in alcohol consumption due to its proximity to Delhi, and West Bengal, particularly Kolkata, has a strong alcohol business with various brands. Uttar Pradesh has the highest tax on alcohol and is one of the largest alcohol-consuming states, while Delhi, another major alcohol-consuming state, earns relatively less from alcohol taxes.
The impact of alcohol taxes extends beyond revenue generation, influencing alcohol's availability and affordability, and in some cases, leading to the emergence of a black market. While taxation can be a strategy to reduce consumption, it is just one aspect of a multifaceted issue influenced by cultural, social, and economic factors.
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Urban vs rural: higher consumption in rural areas
Alcohol consumption in India has been on the rise. A 2019 government survey found that one in seven Indians in the 10-75 age group consumes alcohol. While alcohol consumption is higher in rural India, certain states and urban areas also exhibit higher consumption rates.
Alcohol consumption in India is higher in rural areas than in urban areas. The National Family Health Survey-5 (NFHS-5), 2019-21, found that overall, 1% of women aged 15 and over consume alcohol, compared to 19% of men in the same age group. This breaks down to 1.6% of rural women and 0.6% of urban women, and 19.9% of rural men and 16.5% of urban men. Arunachal Pradesh has the highest proportion of alcohol consumers for both men (53%) and women (24%).
The higher consumption rates in rural areas are not unique to India, as similar trends have been observed in other countries. A scoping review published in The Lancet Public Health examined 280 studies from 49 countries and found that 60% of them reported an increased likelihood of hazardous alcohol use or alcohol-related harm in rural relative to urban communities. This proportion has increased over time, between 1990 and 2019, and varies by country, age group, and outcome type.
In the United States, for example, studies have shown that binge drinking and alcohol use disorder (AUD) rates differ between rural and urban populations. Rural Hispanic youth and Asian/Pacific Islander populations in the U.S. have been found to have higher AUD rates in rural areas compared to their urban counterparts. However, it is important to note that the research in this area is complicated by varied systems used to classify geographic locations, and the interaction of demographic factors such as age, region, and race/ethnicity.
While the average per capita consumption expenditure on alcohol is higher in certain Indian states with significant urban populations, such as Assam, Chhattisgarh, and Haryana, it is important to distinguish between consumption expenditure and consumption volume. The higher expenditure in these states may be influenced by factors such as state excise taxes and the cost of alcohol, rather than solely reflecting the volume of alcohol consumed.
In summary, while alcohol consumption in India is generally higher in rural areas, there are complexities and variations within different states and demographic groups. Further research and standardized definitions are needed to fully understand the interplay of geographic, social, and cultural factors influencing alcohol consumption patterns in India.
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India's alcohol market: 9th-largest consumer, 2nd-largest spirits consumer
India is the world's 9th largest consumer of alcohol and the second largest consumer of spirits, such as whiskey, vodka, gin, rum, tequila, and liqueurs. Notably, India is second only to China in spirit consumption. The Indian alcohol market is projected to be worth $35 billion.
The alcohol market in India is comprised mainly of Indian-made Indian liquor (IMIL), Indian-made foreign liquor (IMFL), wine, beer, and imported alcohol. Spirits such as brandy, whiskey, and scotch dominate the alcoholic beverage imports to India. However, heavy import duties and taxes make imported alcohol a minuscule player in the country's alcohol market.
Alcohol consumption in India is influenced by distinct cultural diversity and varying laws regulating Indian states. For example, "dry days" occur a few times a year across the country during which the sale of alcohol is prohibited. These occur on Republic Day, Independence Day, Gandhi Jayanti, and election day. Additionally, alcohol drinking habits vary across the country, with consumption higher in rural areas than in urban areas. Arunachal Pradesh has the highest proportion of men and women who drink alcohol, with 53% of men and 24% of women consuming alcohol.
The Indian alcohol industry is marked by fierce competition, with both domestic and foreign companies fighting for market share across various categories such as wine, beer, and spirits. To gain a competitive edge, companies employ various tactics such as product innovation, pricing strategies, distribution network expansion, acquisitions, mergers, and marketing campaigns. The expansion of craft spirits and microbreweries, along with the growing demand for premium and imported brands, is expected to drive the growth of the Indian alcohol industry.
Changing demographics and cultural attitudes are also influencing the alcohol market in India. The increasing financial independence of women has led to a rise in alcohol consumption among women, contributing to the expansion of the Indian alcohol industry. Additionally, the younger generation's changing consumer behavior, such as the preference for premium spirits and the acceptance of alcohol as a social norm, is shaping the market.
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Frequently asked questions
A study by the National Institute of Public Finance and Policy (NIPFP) found that households in the two Telugu-speaking states of Andhra Pradesh and Telangana had the highest average annual per capita consumption expenditure on alcohol across the country.
Alcohol consumption is higher in rural India than in urban India. Arunachal Pradesh has the highest proportion of men (53%) and women (24%) who drink alcohol. Following Arunachal Pradesh, alcohol consumption among men is highest in Telangana (43%) and Sikkim (16%) for women.
One key data point is state excise collections as a percentage of alcohol production and consumption. State excise is the third largest source of the state's own tax revenue (OTR) and includes the consumption of alcoholic beverages, narcotics, and, in some states, sales tax on alcoholic beverages.
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