Cautious Whisky Tango: India-UK Trade Agreement and Its Impact

The recently signed India-UK free trade agreement introduces a gradual reduction of import duties on Scotch whisky over a ten-year period, a move that officials claim will have minimal influence on India's burgeoning alcoholic market. The phased decrease will see duties drop from 150% to a mere 40%. Despite India's sizeable market, currently dominated by country-made and India-made foreign liquor, Scotch remains a minor player at 2.5% of total whisky consumption.

The Scotch Whisky Association reports that India has reclaimed its position as the largest Scotch export market by volume, surpassing France with 192 million bottles exported in 2024. However, experts caution that existing high duties have stifled potential foreign direct investment in the industry. By easing these tariffs, India may benefit from improved revenues, reduced counterfeit markets, and enhanced quality controls through UK expertise.

Industry advocates voice apprehension concerning larger trade deals, warning that further duty reductions could negatively affect local producers if extended to the EU, US, and other key markets. To achieve the government's $1 billion export goal by 2030, substantial market access to the UK and beyond is deemed essential, despite ongoing concessions in various Indian states.

(With inputs from agencies.)