India’s Water Crisis Poses Growing Risks for Global Beverage Companies

India’s worsening water scarcity is emerging as a major challenge for global beverage and alcohol companies operating in the country, particularly in water-stressed states like Rajasthan. In regions such as Alwar, where groundwater levels are rapidly declining, firms like Heineken, Carlsberg and Diageo must balance production needs with strict regulations and mounting concerns from local communities that receive piped water only once a week.

Rajasthan, much of which lies in the Thar Desert, faces heavy pressure on groundwater due to agriculture, industry and tourism. Indian laws requiring alcohol producers to manufacture within each state force beverage companies to operate local plants despite water shortages. Although industry accounts for only about 2% of the state’s water use, companies are required to install rainwater harvesting systems, adopt water-efficient technologies and replenish groundwater in areas officially classified as over-exploited.

While brewers say they are improving water efficiency, recycling wastewater and investing in community water projects, tensions persist in nearby villages where access to water remains limited. The challenges in Rajasthan reflect a broader national issue, as India supports 17% of the world’s population with only 4% of its freshwater. As economic growth accelerates, pressure on scarce water resources is expected to intensify, raising long-term operational and social risks for water-dependent industries.

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