What Is IMFL?
Indian Made Foreign Liquor (IMFL) is the official term used by Indian state excise departments to describe spirits manufactured domestically using internationally recognised production methods and styles.
The category includes whisky, rum, vodka, gin, and brandy produced in India. It is distinct from country liquor, which is typically produced using traditional methods, sold at lower price points, and regulated under separate frameworks. It is also distinct from imported spirits that are manufactured outside India.
Despite the somewhat awkward name, IMFL is the backbone of India’s organised spirits industry. It accounts for the majority of packaged alcohol sales by value across the country and has been the primary growth engine of the sector through the 2010s and into the 2020s. You can see the breadth of what this category covers by looking at AABL’s spirit portfolio, which spans whisky, vodka, rum, gin, and brandy across price tiers.
The Numbers Behind the Growth
India’s IMFL market was valued at approximately $60 billion in 2025 and is projected to exceed $101 billion by 2032.
This represents a compound annual growth rate of roughly 7.7%, making India one of the fastest-growing major spirits markets globally.
In volume terms, IMFL sales surpassed 350 million cases in 2022 and have continued expanding, supported by favourable demographics, rising incomes, urbanisation, and changing consumer preferences.
India is already the world’s largest whisky market by volume and ranks among the leading global markets for rum and brandy.
While economy IMFL still contributes the majority of total volume, the strongest growth and highest value creation are increasingly occurring within premium, super-premium, and luxury segments.
Key Trends Shaping IMFL in 2026
1. Premiumisation Is No Longer Just an Urban Story
For several years, premiumisation in Indian spirits was largely concentrated in major metropolitan markets such as Mumbai, Delhi, Bengaluru, and Hyderabad.
By 2026, the trend has expanded significantly into Tier-2 cities including Indore, Lucknow, Pune, Coimbatore, and similar emerging consumption centres.
Rising household incomes, improved retail infrastructure, and a younger consumer base are driving demand for higher-quality spirits beyond traditional metropolitan markets.
Brands positioned within the mid-premium segment—typically priced between ₹500 and ₹1,200 per bottle—are experiencing some of their strongest growth rates in these developing markets.
This shift suggests that premiumisation is increasingly being driven by broader economic development rather than being limited to urban demographic changes.
2. Indian Single Malt Has Arrived
Indian single malt whisky has evolved from a niche category into a recognised segment within the global premium spirits market.
Brands such as Amrut, Paul John, Indri, and GianChand have received international recognition and helped reshape perceptions of Indian whisky among enthusiasts and critics worldwide.
Within India, consumer demand for premium, locally produced aged whisky continues to grow steadily.
This creates significant opportunities for distilleries with the maturation infrastructure to enter the segment. Associated Alcohols & Breweries Limited commissioned a dedicated single malt facility in 2025, with the first aged expressions expected by FY27 made possible by an end-to-end grain-to-glass distillation model that gives full control over spirit character from the mash stage through cask maturation. The investment is forward-looking: consumer willingness to pay for Indian single malts at premium price points is already established; supply is the current constraint.
3. The UK–India FTA and Its Impact on IMFL
The anticipated India–UK Free Trade Agreement, pending ratification as of late 2025, is expected to increase the availability of bulk Scotch whisky imports into India.
For many Indian IMFL producers, this development is viewed as an opportunity rather than a threat.
Greater access to bulk Scotch stocks at more competitive prices allows Indian distilleries to improve blending quality for premium whisky products while maintaining cost efficiency.
The agreement may ultimately raise the overall quality ceiling for premium Indian whiskies without significantly increasing production costs.
4. Gin’s Breakout Moment
India’s gin segment has grown sharply over the past three years. Driven by cocktail culture, rising hospitality consumption, and a series of well-positioned Indian craft gin launches, the category now commands significant space in premium bars and modern retail. Distilleries with gin production capability are well-placed to serve both own-brand and contract manufacturing demand in this segment.
AABL produces London Bridge Gin among its in-house brand portfolio, with capacity to expand contract manufacturing in the category as demand continues.
5. Ethanol Policy Is Reshaping Distillery Economics
The Government of India’s Ethanol Blended Petrol (EBP) programme has become an important structural factor influencing distillery economics.
Grain-based ethanol production provides an additional revenue stream that complements traditional IMFL operations.
Facilities such as AABL’s 130 KLPD ethanol plant at Barwaha illustrate how ethanol production can diversify earnings and improve business resilience.
For integrated distilleries, ethanol revenue can provide stability during periods when state excise markets experience slower growth or delayed payment cycles.
6. Regulatory Fragmentation Remains a Structural Challenge
India’s alcohol industry remains one of the most complex regulatory environments in the world.
Because alcohol regulation falls under state jurisdiction, pricing structures, taxation systems, label approvals, and distribution frameworks vary significantly across states.
The introduction of Maharashtra Made Liquor (MML) in 2025 highlighted how state-specific policy changes can add further complexity for national brands and manufacturers.
Payment delays in certain state-controlled distribution systems continue to create working-capital challenges for some producers.
As a result, regulatory expertise has become a competitive advantage.
Companies with experienced compliance teams and established state-level relationships are generally better equipped to navigate India’s fragmented regulatory landscape.
What the Outlook Looks Like for 2026–2030
The long-term growth drivers supporting India’s IMFL sector remain firmly in place.
Population growth, rising disposable incomes, urbanisation, evolving lifestyle preferences, and increasing acceptance of alcohol consumption within social settings continue to support demand expansion.
Industry forecasts suggest annual growth rates between 7% and 9% through the remainder of the decade.
Importantly, value growth is expected to outpace volume growth as premiumisation continues across categories.
Distilleries that control high-quality ENA production, have invested in premium and super-premium categories, operate across multiple states, and have established brand or contract manufacturing partnerships with major players are positioned to outperform the sector average. AABL’s current trajectory expanding capacity, single malt commissioning, ethanol revenue diversification, partnerships with global brands, and a multi-line bottling infrastructure that supports both IMFL and IMIL at scale reflects this logic.
Conclusion
IMFL remains the foundation of India’s organised spirits industry, but the category is evolving rapidly.
Consumers are increasingly seeking premium experiences, higher-quality products, and more sophisticated brand offerings. At the same time, industry participants are investing in maturation infrastructure, ethanol production, premium portfolios, and operational efficiency.
The result is a market that is becoming more diverse, more competitive, and more quality-focused than ever before.
As India continues to strengthen its position as one of the world’s most important spirits markets, IMFL will remain at the centre of that growth story supported by changing consumer preferences, expanding premium segments, and ongoing industry innovation.