Can Affordable Scotch Revolutionize India’s Whisky Market Under the New India-UK Trade Deal?

Indian premium whisky makers view the recently signed India-UK free trade agreement (FTA) as a growth opportunity. The FTA reduces customs duties on UK whisky and gin from 150% to 75% immediately and to 40% over the next decade. This move aims to make premium spirits more affordable in India, the world’s largest whisky market.

Radico Khaitan plans to import Scotch malt worth ₹250 crore in FY 2025-26. Managing Director Abhishek Khaitan highlighted the “significant cost advantage” the FTA brings. The company, known for its ‘Rampur’ single malt and Jaisalmer gin, expects lower input costs and improved profit margins.

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Allied Blenders & Distillers (ABD), makers of Officer’s Choice, welcomed the duty cuts. The company believes the FTA will benefit its super-premium to luxury segment by improving accessibility and enabling competitive pricing. John Distilleries also sees scope for portfolio expansion and collaboration with international brands.

Concerns Over Duty Cuts and Impact on Domestic Whisky Industry

However, some domestic players expressed concern. Amrut Distilleries MD Rakshit N Jagdale warned that steep duty reductions might discourage local expansion projects. He emphasized that such projects contribute significantly to India’s manufacturing GDP and generate employment across the supply chain.

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John Distilleries Chairman Paul P John voiced caution. While he acknowledged potential gains in the UK market, he expressed uncertainty about the deal’s impact on domestic sales and pricing.

In 2024, India imported 192 million bottles of Scotch, making it the largest market by volume. Yet, in value terms, it ranked fourth with exports worth £248 million. Meanwhile, Indian Made Foreign Liquor (IMFL) sales rose 14% by volume in FY23, and premium segment sales grew 45%. Industry leaders urge policymakers to adopt balanced trade strategies to ensure local brands like Amrut, Paul John, Indri, and Rampur continue thriving alongside imported Scotch.