In the northwestern state of Rajasthan, some of the world’s largest beverage companies face the added challenge of securing and managing dwindling water supplies while dealing with strict government regulations and the grievances of some local people who receive water supplies only once a week.
Nearly two-thirds of Rajasthan is covered by the Thar Desert, and groundwater extraction is among the highest in India, adding to the economic pressure on the state as it tries to balance the needs of its 85 million people, thriving tourism, manufacturing and large agricultural sectors.
Laws in India, the world’s most populous country, ban the movement of liquor across state lines without a special permit, effectively forcing companies to set up production in every state they want to sell in, despite water scarcity. So, global giants like Diageo, Carlsberg and Heineken have to maintain factories in Rajasthan if they want to distribute their products in the state.
“(Water stress) is a growing problem in India,” said Sonia Thimmiah, senior director of global sustainability at Heineken, the market leader, adding that a few years ago, demand for water in some cities almost exceeded supply.
Heineken, Carlsberg and Diageo said they are increasing water efficiency in Rajasthan and other water-scarce regions, have been working to improve communities’ access to water and are committed to returning 100 percent of the water their factories use to the source.
The challenges facing brewers in Rajasthan reflect a broader crisis across India, where 17 percent of the world’s population lives but only 4 percent of its fresh water. As the world’s fastest-growing major economy, India’s appetite for growth means more production and greater pressure on scarce water resources.
The tension is evident in the industrial city of Alwar in Rajasthan, about 150 km southwest of Delhi, where most beverage companies are located. Groundwater extraction in the wider Alwar district, driven mainly by irrigation, is proceeding almost twice as fast as aquifers can recharge, government data shows.
Industrial users consume only about 2 percent of water in Rajasthan, but Indian law requires all industrial and commercial entities seeking to extract groundwater to install on-site rainwater harvesting and aquifer recharge systems.
In areas like Alwar, which the government classifies as “overexploited” for groundwater, industries are further required to adopt “latest water-efficient technologies to reduce dependence on groundwater resources,” according to a 2020 government order, without specifying details.
“Groundwater levels are falling and rainfall is variable,” Sumit Walia, head of Alwar at Diageo, told Reuters.
“We have a vision to reduce water consumption by 40 percent and ensure that all water extracted from the ground is replenished 100 percent. We recycle 100 percent of wastewater and install advanced technologies that use less water,” such as using air to rinse bottles instead of water, he said.
TENSION WITH VILLAGES
Federal authorities have allowed brewers in Alwar to extract about 4.6 million liters of groundwater daily under 2025 permits seen by Reuters, based on applications from the companies. Global companies account for about 65 percent of this, with Heineken at the top of the list with 1.2 million liters.
A typical Indian household uses 500 to 600 liters a day, but even that is difficult in the village of Salpur, next to the Alwar industrial cluster, where water is a luxury.
“The situation is very bad,” said Imran Khan, head of the village of nearly 4,500 residents, who grows wheat and onions on his ancestral land. “We have to give the borehole owner several days’ notice to pump water for us – there is a queue.”
He says he had to spend about 150,000 rupees ($1,700) to build a three-kilometer pipeline from the borewell to his fields, and had to pay 150 rupees for every hour of water supplied by the owner, a resident of another village.
Some locals blame the shortage on brewers.
“They make alcohol there, but the locals don’t have enough water to drink,” said Alwar resident Haider Ali, who last year took several global and local alcohol companies to India’s environmental court, alleging they were extracting water without permission.
A court-appointed inspection team later found that all factories were in compliance. But the same court ordered authorities in March to actively monitor groundwater extraction and strictly enforce a 2020 government order banning the issuance of new water permits to major industries in overexploited areas.
Heineken and Carlsberg said there was no sign of community tensions in Alwar following this lawsuit, partly due to their work with locals on water issues. Diageo’s Walia said he was not aware of the lawsuit, but that industries that make paper, cars and other products use more water than beverage companies.
The water problems are not limited to Rajasthan.
Reuters has reported how India has lost several days of coal power supplies over the past decade as water shortages forced plants to suspend generation.
In Coca-Cola’s 2023 water security plan, reviewed by Reuters, the company says it operates nine plants in India in areas of “high or extremely high water stress” and estimates that annual costs for purchasing water could increase by $180,000 to $2.7 million.
The company, which closed a factory in the southern state of Kerala in 2005 after protests over groundwater depletion, declined to comment.
‘ALWAYS ROOM FOR MORE’
Beverage companies say they are a small part of the problem in Rajasthan, and that their water initiatives are having a significant positive impact.
Carlsberg’s vice-president for sustainability Simon Boas Hoffmeyer said the targets, which include replenishing all water used, go beyond legal requirements. “If everyone did that, the industry’s share of the issue would be very, very small,” he said.
Diageo’s global head of environment Michael Alexander said the company has built small dams and planted 10,000 trees in Salpur, while in Alwar it has dewatered ponds, installed rainwater harvesting on roofs and financed boreholes and pipelines for communities.
Similar projects by Heineken had a positive impact in Rajasthan, said Subhransu Kumar Bebarta, associate partners at the SM Sehgal Foundation, a non-profit organization that implements the company’s water projects.
But big companies can go further, he said, and bigger infrastructure projects are needed in a state where some people are struggling to find water to drink.
“They have improved the water table. But there is always room for more.”
($1 = 90.2450 Indian Rupees)
Published on December 26, 2025
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