India's US$28bn alcoholic beverages market is expected grow to US$45bn by 2015 and will be lifted by growing consumer taste for luxury spirits, according to a new report.

The Indian Luxury Review 2011, published this week by the Confederation of Indian Industry (CII) and consultancy AT Kearney, predicted strong growth for spirits worth more than $75 per bottle. Their value share of India's total spirits market will almost double, to 1.5%, by 2015, with sales expected to reach $670m. 

Indians are trying new and more expensive spirits to experiment and demonstrate status, the report said. However, market growth will be slowed by inherent cultural and regulatory constraints, according to Neelesh Hundekari, head of lifestyle and luxury research in India at Kearney: “Indians still have a prohibition mind-set,” he said, which fuels government controls on distribution and high taxes.

In terms of region-wide distribution, southern India dominates the national alcohol market with a 35% to 40% volume share; while the east has between 10% and 15%.