Groundwater depletion, tighter regulation and local scrutiny are reshaping how global liquor makers operate in the arid state
Global liquor and beverage makers operating in Rajasthan are stepping up water conservation measures as groundwater depletion, tighter regulation and local scrutiny increasingly shape industrial operations in the water-stressed state, Reuters reported.
Nearly two-thirds of Rajasthan falls in the Thar Desert and the state is among India’s highest extractors of groundwater. With a population of about 85 million, water demand from households, agriculture, tourism and industry has intensified amid falling aquifer levels and erratic rainfall.
Alcohol manufacturers face an added regulatory constraint. Indian laws restrict inter-state movement of liquor without special permits, effectively requiring companies to set up production facilities in every state they serve. This has led global players such as Diageo, Carlsberg and Heineken to operate plants in Rajasthan despite acute water stress in several districts.
Heineken’s senior director of global sustainability, Sonia Thimmiah, has said water stress is becoming a growing challenge in India, noting that in recent years demand in some cities had nearly matched available supply.
The companies said they are increasing water-use efficiency at factories, investing in local water access projects and working towards replenishing all the water used in manufacturing back into local sources.
The situation in Rajasthan mirrors a broader national concern. India supports nearly 17 per cent of the global population but has access to only about 4 per cent of the world’s freshwater. As economic activity expands, pressure on water resources has risen sharply, particularly in arid and semi-arid regions.
The strain is evident in Alwar, an industrial town around 150 km from New Delhi that hosts several beverage units. Official data show groundwater extraction in the wider Alwar district is running at nearly twice the aquifer recharge rate, largely driven by irrigation.
Although industry accounts for about 2 per cent of Rajasthan’s total water consumption, regulations require all industrial and commercial groundwater users to install rainwater harvesting and recharge systems. In areas classified as “over-exploited”, including Alwar, industries are also mandated to adopt advanced water-efficient technologies under a 2020 government order.
Diageo’s Alwar head Sumit Walia has said groundwater levels are declining and rainfall patterns have become unpredictable. He said the company is targeting a 40% reduction in water consumption, full replenishment of groundwater withdrawn and complete recycling of wastewater, along with adoption of low-water technologies such as air-based bottle rinsing.
Local Concerns, Regulatory Action
Under permits valid until 2025, authorities have allowed beverage companies in Alwar to collectively extract up to about 4.6 million litres of groundwater per day. Global brewers account for roughly 65 per cent of this allocation, with Heineken being the largest individual user at around 1.2 million litres per day.
In nearby Salpur village, residents rely largely on borewells and tanker supply. Village head Imran Khan has said households often have to wait several days to access water, with borewell owners supplying it on an hourly payment basis.
Some residents have linked water scarcity to industrial activity. Alwar resident Haider Ali, who last year approached the National Green Tribunal alleging unauthorised groundwater extraction by alcohol companies, has said that while liquor is produced locally, residents struggle to access drinking water.
A court-appointed inspection team later found the factories compliant with regulations. However, the tribunal in March directed authorities to strengthen monitoring of groundwater extraction and strictly enforce the 2020 order restricting fresh permits for large industries in over-exploited areas.
Heineken and Carlsberg have said they have not observed wider community tensions beyond the legal proceedings and cited ongoing engagement with local communities. Diageo has said other sectors such as paper and automobile manufacturing consume significantly more water than liquor production.
Industry Response
Water scarcity is emerging as a material risk across Indian industry. In recent years, coal-based power plants in multiple states have curtailed generation due to inadequate water availability.
Coca-Cola, in its 2023 water security plan, said several of its India facilities operate in high or extremely high water-stress areas and that water procurement costs could rise materially. The company declined to comment.
Beverage makers argue their share of Rajasthan’s water use remains limited and that conservation initiatives are delivering results.
Carlsberg’s vice president for sustainability, Simon Boas Hoffmeyer, has said the company’s water replenishment targets exceed regulatory requirements and that wider adoption of such practices would significantly reduce industry impact.
Diageo’s global head of environment, Michael Alexander, has said the company has built small dams, planted thousands of trees, desilted ponds and funded rainwater harvesting, borewells and pipelines for communities across Alwar.
Heineken’s projects have helped improve groundwater levels in parts of Rajasthan, according to Subhransu Kumar Bebarta of the S M Sehgal Foundation, which implements the company’s water programmes. However, he said larger infrastructure interventions are still needed in a state where access to drinking water remains uncertain.
(With input from Reuters Report)
