Duty-Free Alcohol Sales at Indian Airports Break Records as Travelers Go Premium

New Delhi (The Uttam Hindu): While central and state governments earn hefty revenue from alcohol taxes, there is one place in India where alcohol is completely tax-free — the duty-free shops at airports. Sales at these outlets have shattered all previous records, growing at a pace more than double that of domestic retail stores.

According to the latest IWSR Drinks Market Analysis report, alcohol sales in India’s duty-free and travel retail sector surged 13% in 2024, compared to just 6% growth in local city stores. This highlights the growing preference of travelers to purchase tax-free alcohol during air travel.

Whisky, which accounts for nearly three-fourths of total sales, sold at a 12% growth rate at airports, while the Indian domestic market saw an 8% decline in whisky sales during the same period.

The report predicts that passenger traffic in Indian airports will increase by 50% over the next five years, further boosting alcohol sales. Charlotte Reed, Senior Insight Manager at IWSR, stated that Indian travelers will be crucial for the future success of Global Travel Retail (GTR).

The trend is attributed to India’s growing middle class, rising incomes, and changing consumer behavior. Today’s consumers, especially the younger generation (Gen Z and Millennials), prioritize brand and experience over price.

Rediko Khetan COO Amar Sinha noted, “Travelers have ample time at airports to see, understand, and purchase brands. Airports have become an ideal platform to popularize premium and luxury brands.”

In 2024, duty-free sales grew as follows: Scotch whisky up 11%, American whisky up 8%, and Indian whisky up 10%. The most striking growth was in vodka, which surged 48%, nearly three times higher than the domestic market growth.