Foreign Distillers Seek to Slake India’s Thirst

Diminished social disapproval of alcohol consumption among India's middle class, coupled with a national economy increasingly open to foreign investment, is attracting big foreign distillers to India. For decades, India vigilantly regulated foreign investment, choosing instead to bolster and develop its local industries. With increased pressure from the World Trade Organization (WTO) to open up the economy to foreign investment, India is cautiously negotiating foreign forays into India. Foreign alcoholic beverage companies have set up offices and even established local distilleries that produce domestic-label brands. Foreign brands face stiff competition from well-established local brands with lower prices. Backed by the WTO, foreign companies are pressuring the Indian government to cut, but not eliminate, the very high taxes on imports. For the high-income, upwardly mobile information technology and software professionals, and the westernized middle-class youth, foreign brands represent a much sought after social status and prestige. Foreign companies anticipate a ready-made market for their products, and are finding unique ways – sponsoring fashion shows and theme nights at trendy bars – to build a clientele. –YaleGlobal