From Shots to Sips: Tequila market soars 26% growth as star-backed brands drive premium shift
From the Aryan Khan–Nikhil Kamath–Radico Khaitan luxury launch to Rana Daggubati’s Loca Loka, tequila is shedding its “party shots” image and riding India’s cocktail boom to become the next big premium sipping trend.
ADVERTISEMENT
Once seen in India as nothing more than a “party shots” spirit, tequila is rapidly moving into premium sipping territory- fueled by celebrity-backed launches, high-end positioning, and an urban cocktail culture that shows no signs of slowing down.
According to IWSR 2025, the tequila category in India is growing at a blistering 26% year-on-year, far outpacing most other spirits segments. Although absolute numbers remain small, sales almost doubled in 2023, from 68,200 nine-liter cases in 2022 to nearly 123,000 in 2023, and are projected to generate $120 million in revenue by 2030, with an expected CAGR of over 10% in the coming years.
Industry experts agree that the surge in cocktail culture, especially in 2024, has created fertile ground for tequila. “Its hybrid positioning, straddling both light and dark spirit profiles, may well give it a place in both the brown and white spirits repertoires of Indian consumers,” said Nita P. Kapoor, co-founder of Integrated Insights Consulting and former CEO of ISWAI.
Read more: Tequila's moment in India: What it is, why it's growing - and what the SRK-Kamath collab means
Tequila is increasingly finding its way into menus at premium bars and lounges. From smoky mezcal margaritas to tequila negronis, the spirit’s adaptability is helping it gain ground with both seasoned drinkers and experimental newcomers. The emergence of the Tulleeho Tequila Club, India’s first agave-focused club, signals that the market is maturing beyond novelty consumption.
The Celebrity Shake-Up
The latest spark came when Radico Khaitan Limited announced it will acquire a 47.5% stake in D’YAVOL Spirits for up to ₹400 million. The deal, valuing D’YAVOL Spirits at ₹842 million, brings together heavyweight partners Aryan Khan, Shah Rukh Khan, and Zerodha co-founder Nikhil Kamath. Their first launch will be a luxury tequila bottled in origin (BIO), targeting both Indian metros and international markets. For Radico, whose “Taking India to the World” strategy has already pushed Indian single malts into global limelight, tequila offers a first-mover advantage in an underpenetrated premium category.
Karan Taurani of Elara Securities believes the partnership could be a defining moment for tequila in India. “This could give Radico a first-mover edge in India’s tequila premiumisation story after the success of Indian single malt,” he says. “Partnering with SRK, Aryan Khan, and Nikhil Kamath offers powerful brand storytelling potential, while Radico’s distribution network and marketing muscle provide a strong moat.”
It’s not the only high-profile tequila play. Actor Rana Daggubati and music composer Anirudh Ravichander co-founded Loca Loka, a brand that positions itself as a sophisticated, versatile spirit for India’s evolving urban drinker. “The category is moving beyond its party-shot reputation,” said Loca Loka founder and CEO Sree Harsha Vadlamudi. “High-profile launches act as a catalyst, much like gin’s transformation in recent years, elevating tequila into a sipping culture. The demand for tequila-based cocktails is a clear indicator that Indian consumers are ready to embrace it as a premium choice.”
The category is moving beyond its party-shot reputation towards a more premium culture, say experts.
India’s projected CAGR of 12.69% for tequila from 2025 to 2033, combined with rising sales of super-premium bottles at duty-free stores in Delhi and Mumbai, reinforces that shift. Urban youth, Vadlamudi notes, increasingly value craftsmanship, authenticity, and storytelling, and are moving towards conscious consumption, favouring plant-based options such as agave-based spirits.
The Roadblocks Ahead
Despite the hype, tequila brands face steep challenges in India. The market is still dominated by whisky, rum, and vodka, categories with deeply entrenched consumer loyalties. High import duties keep prices steep, inconsistent state-level regulations hamper distribution, and low consumer awareness means many still see tequila purely as a shot glass spirit.
“Inconsistent bartender training and limited product portfolios also slow adoption,” says Himanshu Vig, Senior Consultant – Growth Advisory at Aranca. “Winning here means reshaping perceptions through cocktails, targeted marketing, and constant visibility until tequila feels native, not foreign.”
Storytelling, Heritage, and the Star Factor
In India’s premium spirits race, shelf presence is not enough—especially for a category still finding its footing. Vig believes tequila’s best shot lies in the trifecta of authentic storytelling, celebrity endorsement, and consumer education.
“Education builds credibility, but pairing that with immersive events, tastings, and bartender advocacy turns curiosity into loyalty. Celebrity backing can turbocharge this shift, especially in urban markets where lifestyle and status drive choices.”
Vadlamudi agrees, highlighting how Loca Loka’s co-founders help the brand connect with younger audiences. “Celebrity partnerships are powerful tools to build trust and accelerate market presence,” he says. “By sharing the journey of our brand and the Mexican heritage behind our tequila, we give consumers a reason to become part of a larger narrative.”
If the trajectory mirrors gin’s dramatic transformation over the past decade, tequila could soon become a staple in India’s premium spirits repertoire. The combination of double-digit growth, celebrity-led market entry, and a thriving cocktail scene makes it one of the most watched categories in the next five years.
While execution, pricing, and education will determine whether it stays a niche indulgence or becomes a mainstream choice, one thing is clear: tequila in India is no longer just about late-night shots. It’s about the experience, the story, and the slow sip.
