UK FTA Boosts Scotch Whisky Imports to India with Lower Duties

The Free Trade Agreement (FTA) between India and the United Kingdom is set to revolutionize Scotch whisky imports into India. According to Mark Kent CMG, Chief Executive of the Scotch Whisky Association, the pact will facilitate a substantial increase in bulk Scotch whisky shipments to India. These imports will serve a dual purpose: direct bottling in India and integration into India-Made Foreign Liquor (IMFL). This development is particularly timely as the Indian market for spirits continues its robust year-on-year growth.

Under the FTA, India will progressively reduce import duties on UK whisky and gin. Tariffs are slated to drop from the current 150% to 75%, and further down to 40% over a ten-year period. This tariff reduction is expected to lower prices for bulk whisky, which constitutes 79% of Scotland's total whisky exports to India. Consequently, Indian manufacturers will gain access to more affordable and competitive imported spirits for their IMFL products. Mark Kent expressed optimism about the prospects of Scotch whisky in India, noting the positive trend of premiumisation among Indian consumers. India currently stands as the world's number one export market for Scotch whisky by volume, with 192 million bottles exported in 2024. While Scotch whisky holds a smaller share (around 2.5-3%) in the premium segment of the Indian spirits market, the FTA is anticipated to strengthen its position and offer greater choice to consumers.

Impact This news has a moderate positive impact on the Indian spirits market and related manufacturing sectors. The reduced import duties and increased availability of Scotch whisky can lead to greater competition and potentially influence pricing and product offerings within the premium alcohol segment in India. Rating: 7/10

Definitions: Free Trade Agreement (FTA): An agreement between two or more countries to reduce barriers to imports and exports among them. India-Made Foreign Liquor (IMFL): A term used in India for spirits manufactured in the country but made from imported concentrates or essences, or blended with imported spirits. Premiumisation: A consumer trend where buyers opt for higher-quality, more expensive products over standard or budget options.