India-UK FTA: Understanding the Impact of Duty Concessions on Scotch Whisky in the Indian Market

New Delhi: The recent India-UK free trade agreement will gradually cut import duties on Scotch whisky, but experts say the impact on the local market will be minimal. A government official mentioned that the reductions will unfold over ten years, starting with a decrease from 150% to 75% in the first phase and eventually to 40% by the tenth year.

According to the Scotch Whisky Association (SWA), India has reclaimed its title as the top market for Scotch whisky exports, surpassing France. In 2024, India imported 192 million bottles, up from 167 million in 2023. Despite this growth, Scotch whisky represents just 2.5% of India’s whisky market, dominated mostly by country-made liquor (88%).

India’s alcoholic beverage market is booming, valued at approximately USD 52.4 billion, with an expected growth rate of 7.7% from 2025 to 2032. Even with lower tariffs, the government anticipates that the shift in imports won’t drastically disrupt local sales. The official stated that ongoing customs duties would still make Scotch relatively expensive.

There’s potential for positive changes, too. Lowering tariffs could attract UK expertise in spirit-making and improve the quality of Indian beverages. This could also enhance foreign direct investment (FDI) in the industry, boosting local production and technology access.

However, industry leaders raise concerns. Anant S. Iyer from the Confederation of Indian Alcoholic Beverage Companies cautioned against adopting similar duty reductions in future trade agreements with other regions like the EU and the US. He fears this could hurt the burgeoning Indian alcoholic beverage sector. Iyer also noted that states offering excise concessions for imported liquor need to reconsider these policies.

The Indian government’s goal is to reach USD 1 billion in alcoholic beverage exports by 2030, but achieving this will require careful market access strategies, especially with key trading partners.

This trade agreement reflects broader global trends in the alcohol market. As consumer preferences shift toward premium products, the integration of expertise from established markets like the UK may reshape production and consumption dynamics. Balancing international trade with domestic interests will be crucial as India navigates this evolving landscape.

For more detailed statistics on the global whisky market and trade agreements, check reports from the [Scotch Whisky Association](https://www.scotchwhiskyassociation.co.uk) and the [Indian Ministry of Commerce](https://commerce.gov.in).

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