India-UK Free Trade Agreement to Boost Scotch Whisky Imports and Lower Prices

The impending Free Trade Agreement (FTA) between India and the United Kingdom is expected to dramatically boost the import of Scotch whisky into India, according to Mark Kent CMG, Chief Executive of the Scotch Whisky Association. Upon ratification, the agreement will facilitate increased imports of bulk Scotch whisky, which will be used by Indian manufacturers for bottling locally and for incorporation into India-Made Foreign Liquor (IMFL) products.

A key aspect of the FTA is the reduction of import duties on UK whisky and gin. These duties are slated to decrease from the current 150% to 75%, with a further reduction to 40% by the 10th year of the deal. This measure is particularly beneficial for bulk Scotch, representing 79% of Scotland's whisky exports to India, thereby making imported Scotch more competitive and affordable for Indian bottlers and consumers.

India is already the largest global market for Scotch whisky by volume, with 192 million bottles exported in 2024. The FTA is anticipated to enhance this position, especially given the growing trend of premiumisation among Indian consumers. Despite competition from Bourbon and Japanese whiskies, Scotch, with its established consumer base, is poised for growth.

Impact: This agreement will positively affect Indian alcoholic beverage manufacturers involved in bottling and producing IMFL. It is also expected to benefit Indian consumers through potentially lower prices and increased availability of premium Scotch. The FTA signifies a strengthening of trade ties and industry collaboration between India and the UK. Impact Rating: 7/10

Difficult Terms: * **Free Trade Agreement (FTA)**: A pact between two or more countries to eliminate or reduce tariffs, quotas, and other trade barriers to facilitate easier trade of goods and services. * **Bulk Scotch Whisky**: Scotch whisky sold in large containers, often intended for re-bottling in the destination country or for use as an ingredient in blended spirits. * **IMFL (India-Made Foreign Liquor)**: Alcoholic beverages manufactured in India but produced in the style or according to the standards of foreign liquors. * **Premiumisation**: A consumer trend where individuals increasingly opt for higher-priced, higher-quality, or more luxurious versions of products, often associated with enhanced brand status or superior experience.