India-UK Free Trade Agreement
After the Free Trade Agreement (FTA) between India and Britain, a big change can be seen in the premium whiskey market of the country. Under this agreement, the import duty on Scotch whiskey and gin has been reduced from 150% to 75%. It will be further reduced to 40% in the next 10 years.
Liquor industry experts believe that this will reduce the prices of imported Scotch whiskey, provide more choices to customers and increase competition in the premium whiskey segment.
No big price drop expected immediately
However, industry experts say consumers should not expect to find Scotch whiskey very cheap just yet. The reason for this is that the excise duty of the state governments, VAT, transportation expenses and distributor’s margin also play a big part in the final price of any bottle. This means that the full benefit of reduction in import duty will not reach the customers immediately.
Demand for premium whiskey will increase in India
Experts believe that this agreement will further accelerate the already ongoing trend of “premiumization” in India i.e. buying expensive and better quality liquor. Besides, Indian companies will also have to further improve the quality of their products.
India is the largest whiskey market in the world. According to industry estimates, around 25.9 crore (259 million) 9-litre cases of whiskey were sold in the country in 2024. Whiskey accounts for about two-thirds of India’s total spirits market.
India is already the biggest market for Scotch
Even before the implementation of FTA, India was the world’s largest Scotch whiskey market in terms of volume. According to the Scotch Whiskey Association (SWA), Scotch worth 248 million pounds (248 million pounds) was exported to India in 2024, which is equivalent to about 192 million (192 million) 700 ml bottles. However, India is only the fifth largest market in the world by value, because there has been a high demand for lower priced Scotch.
Premium Scotch may become cheaper by 15-20%
Rakshit Jagdale, managing director of Amrit Distilleries, believes that the prices of premium and luxury Scotch whiskey may come down by 15% to 20%. This will also benefit those Indian companies which import Scotch to make blended whiskey.
At the same time, the estimate of International Spirits and Wines Association of India (ISWAI) is slightly less. According to the organization, if the companies give full relief in import duty to the customers, then in a state like Maharashtra, Scotch priced at Rs 2,500 can become cheaper by about 12% and 12-year old Scotch priced at Rs 4,250 can become cheaper by about 13%.
Indian single malt does not see any danger
Despite the availability of cheap Scotch, Indian single malt companies are not worried. He says that Indian single malt has now made its own identity in the world in terms of quality.
Piccadilly Distilleries, which makes the Indri brand, says that this agreement will not be a price war, but will increase competition on quality and new experiments. Indian single malts have received several international awards over the years, strengthening their global reputation.
IMFL companies will also benefit
Big benefit of this agreement will also be given to those Indian companies which make Indian Made Foreign Liquor (IMFL) using imported Scotch. About 79% of the Scotch coming to India comes in bulk (loose form), which is used to make blended whiskey. With the reduction in import duty, the costs of these companies will reduce and they will be able to produce better quality products.
State governments will decide taxes
Experts say that ultimately how cheap whiskey the customer will get will largely depend on the taxes imposed by the state governments. If state governments increase excise duty or other taxes, the benefit of reduction in import duty may be lost to a great extent.
Competition will increase in premium market
Experts believe that India-UK FTA will not bring any sudden change in the Indian whiskey market, but the next 10 years will see a big change in the premium whiskey segment. Consumers will have more choices, there will be more emphasis on quality and competition between Indian and foreign brands will be stronger than ever.
