Tequila sunrise as India leads growth charts

Bengaluru:India is now the world's fastest-growing market for tequila. New data from the International Wine and Spirits Record (IWSR), shared exclusively with TOI, shows India recorded a 31% year-on-year increase in volume and a 40% rise in value for agave-based spirits in 2024-25, the highest growth among the 21 markets tracked by the global research firm. The momentum is expected to continue, with volumes projected to grow at a 14% compound annual rate through 2034, effectively doubling consumption by 2031.

The surge is driven by a mix of premiumisation, shifting consumer preferences, and a growing cocktail culture in urban India. “Consumers are drawn to its variety and versatility,” Jason Holway, senior consultant at IWSR, told TOI. “It serves as the base for several popular cocktails but can also be drunk neat, particularly at the ultra-premium end.”

While it’s still a niche drink in a market where whisky dominates 60% of the spirits market, younger drinkers now see tequila as more than just a party shot. It is being positioned as a lighter, lower-calorie alternative to heavier spirits, while also offering a more experiential way of drinking, from curated cocktails to sipping aged expressions. Nearly 60% of consumption comes through cocktails, according to a Diageo India spokesperson, with drinks like Picantes and Palomas driving trial and familiarity.

The category’s growing presence is also showing up in lifestyle spaces, from high-end bars to destination weddings, where cocktail-led celebrations are increasingly shaping consumption trends. At the premium end, companies are positioning tequila as an aspirational, experience-led product. Most Indians tend to discover it over a bar counter rather than a retail shelf.

D’Yavol Spirits, an alcohol brand launched by actor Shah Rukh Khan, his son Aryan Khan and Zerodha founder Nikhil Kamath in partnership with Radico Khaitan, is preparing to launch an Añejo tequila priced between Rs 20,000 and Rs 30,000. “Our entry into tequila is driven by both premiumisation and long-term category potential,” said Leti Blagoeva, CEO of D’Yavol Spirits. “While the base is small, rising awareness and global influence are steadily building scale in India.”

Much of this awareness remains concentrated in metros such as Mumbai, Delhi and Bengaluru, where consumers are more exposed to global drinking trends.

Locally produced agave spirits are also carving out a market. While tequila is made from agave, agave spirits are a broader category. “The data validates what we have been observing for a few years,” said Rakshay Dhariwal, founder of Maya Pistola Agavepura. “Cocktail culture in India has matured very quickly, and agave sits at the centre of that.” He added that while consumption remains largely cocktail-led, there is a “noticeable growth in considered sipping,” particularly for aged expressions.

Dhariwal said Indian agave spirits are not positioned as substitutes for tequila, but as a parallel category shaped by different origins and production methods. “Tequila has done the foundational work of educating consumers about agave… The opportunity is to sit alongside tequila, not to fight for the same position,” he said.

Unlike tequila, which can only be produced in designated regions of Mexico, Indian players are working with agave cultivated in the Deccan Plateau.

Conrad Braganza, COO of Agave India, which makes DesmondJi and supplies agave spirit to brands including Maya Pistola Agavepura, said the category’s growth would be shaped by the nature of the crop itself. “Agave spirits and tequila are not going to scale the same way gin scaled. If I want to increase production 10x as a gin manufacturer, I can do it in one day. With agave, it is a slow agricultural crop. A 10x scale-up would be a 10-year project,” he told TOI. The company, which has set up what it says is Asia’s only agave distillery, uses semi-wild agave that can take 9-13 years to mature, compared with 5-7 years for agave used in tequila in Mexico.

Even so, industry executives say the headroom for growth remains significant. New entrants are beginning to follow that playbook. Premium tequila brand Loca Loka has expanded into Bengaluru after launching in Delhi and Mumbai, targeting cities with strong bar cultures and higher discretionary spending.

For now, tequila in India remains a premium, urban-led category. But with rising incomes, evolving tastes and a growing appetite for new experiences, it is beginning to move beyond the shot glass and into the mainstream conversation.

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Source: IWSR
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