Tequila sales in India jumped 34% in 2025.

Tequila kept expanding rapidly in India in 2025, but new forecasts suggest the category is moving into a slower, more normal phase after several years of breakneck growth.

Data published by IWSR on Wednesday showed that the volume of tequila sold in India rose by 34% in 2025. That made tequila one of the fastest-growing spirits categories in the country, well ahead of the broader Indian spirits market, which grew by 4% in volume and 6% in value last year, according to the research group.

The longer view shows how quickly tequila has moved from a niche imported spirit to a more visible category in bars, restaurants and retail. Between 2019 and 2025, tequila posted a compound annual growth rate of 32% in volume in India, IWSR said. In value terms, the category grew even faster, with a 48% compound annual rate over the same period. In 2025 alone, tequila’s value growth reached 66%, nearly double its volume increase.

Even so, IWSR expects the pace to slow sharply over the next five years. It forecasts tequila volume growth in India at a 13% compound annual rate from 2025 to 2030, with value rising by 15% a year. That would still leave tequila growing much faster than the overall spirits market, but it would mark a clear step down from both the 32% annual volume growth seen from 2019 to 2025 and the 34% jump recorded in 2025.

The moderation matters because it points to a market that is still expanding, but from a small base and at a rate that may be harder to sustain as the category matures. IWSR did not publish liters, cases, market share or pricing data in the release, and the firm noted that the growth starts from a comparatively small base.

Jason Holway, a senior research consultant at IWSR, said the broader engine behind imported and premium spirits growth in India is a changing consumer base. “The biggest driver is the growth in consumers, both new legal-drinking-age consumers and triallists,” he said. “These groups have growing disposable income and are exhibiting inquisitiveness. Brand owners, importers and distributors are putting more products in front of them through evolving routes to market.”

That backdrop helps explain why tequila has found room to grow even in a market still dominated by whisky. Younger urban drinkers, rising cocktail consumption and wider exposure to global brands have all helped categories outside traditional brown spirits gain visibility. Tequila has also benefited from its role in cocktails and from rising interest in agave-based spirits in major cities.

Still, the wider Indian spirits market is expected to remain far larger and steadier than tequila. IWSR projects total spirits in India to grow at a 3% compound annual rate in volume and 4% in value from 2025 to 2030. Whisky is expected to remain the main force in absolute terms. Indian whisky volumes rose by 4% in 2025, while Scotch increased by 5%, according to IWSR. Over the next five years, Scotch is forecast to grow at a 6% annual rate in volume, ahead of the 4% projected for Indian whisky. In value terms, IWSR expects Scotch to rise by 5% and Indian whisky by 4%.

Other categories are also expanding. Vodka was among the strongest recent performers, with 2025 gains of 14% in volume and 12% in value. IWSR expects vodka to grow by 5% a year in both volume and value through 2030. Holway said flavored expressions are driving much of that growth, though unflavored vodka is also still gaining ground.

Gin, another category tied closely to cocktail culture, posted more modest volume growth but stronger gains in value. In 2025, gin rose by 3% in volume and 11% in value, IWSR said. By 2030, the firm expects gin to expand at a 5% annual rate in volume and 7% in value. Holway described the trend as an urban one, linked to drinking at home and in bars.

IWSR also pointed to a surge in non-alcoholic spirits alternatives, though it said the category still accounts for less than 0.001% of total spirits volume in India. Volumes in that segment rose by 369% last year and value climbed by 374%. From 2025 to 2030, IWSR projects annual growth of 56% in both volume and value. The numbers are large, but they also reflect the very small starting point.

Trade policy and state regulation may shape how far imported spirits can go from here. Holway said free trade agreements, including the new UK-India deal, could help imported products by lowering costs and making them more affordable to consumers. He also said possible changes to state excise systems could widen choice in a market where rules differ sharply from one state to another.

Those state-level differences remain one of the main barriers for producers trying to build brands across India. Holway said improvements in retail conditions in Uttar Pradesh, Andhra Pradesh and Kerala have created better sales environments for alcohol. He added that those changes could benefit brandy, which has traditionally been strongest in southern states.

Maharashtra has also drawn attention after introducing a state-specific alcohol category aimed at supporting local production and cutting excise duties to 270%. Holway said the Maharashtra-made-liquor category was settling in and creating opportunities for the state’s distilling sector.

For global spirits groups, India remains one of the most closely watched growth markets, but it is also one of the most complex. “With India being a key growth market, everybody is looking for potential partners with momentum,” Holway said. “The complexity of state-by-state brand building slows the pace of early growth, so it makes complete sense to invest in partners who have already successfully completed this early phase.”

That complexity, he said, is likely to support more merger and acquisition activity as international companies look for local partners with established distribution and regulatory experience.