Lower Scotch Import Duties to Boost Premium Spirits Market
New Delhi, May 18 – Indian premium whisky makers are optimistic that the recent duty concessions on Scotch whisky imports under the India-UK Free Trade Agreement (FTA) will enhance their margins and accelerate market expansion. The FTA, finalized earlier this month, is seen as a key enabler for making premium spirits more affordable and widely available in the Indian market, which is currently the largest consumer of whisky globally.Under the terms of the agreement, India will reduce import duties on UK-origin whisky and gin from the current 150 percent to 75 percent immediately, with a gradual reduction to 40 percent over the next ten years.
Cost Savings to Drive Growth for Indian Blenders
Leading Indian distillers such as Radico Khaitan, Allied Blenders & Distillers (ABD), and John Distilleries expect significant cost advantages, particularly in the use of bulk Scotch for blending Indian Made Foreign Liquor (IMFL) products.Radico Khaitan, one of the largest importers of Scotch malt for blending purposes and owner of award-winning brands like Rampur Indian Single Malt and Jaisalmer Indian Craft Gin, views the FTA as a substantial opportunity.
“Radico plans to import Scotch malt worth ₹250 crore in fiscal year 2025–2026, and this treaty, therefore, benefits us substantially,” said Abhishek Khaitan, Managing Director of Radico Khaitan.
ABD, makers of Officer’s Choice Whisky, also welcomed the agreement. The company said the treaty could enhance accessibility to super-premium and luxury products while opening doors for new collaborations in the spirits industry.
“We anticipate this will offer Indian consumers greater choice and the opportunity to enjoy a wider range of high-quality spirits,” ABD stated.
Scotch Whisky Exports to India at Record High
According to the Scotch Whisky Association, India was the largest consumer of Scotch whisky by volume in 2024, with 192 million bottles exported. In value terms, India ranked fourth globally with exports worth £248 million.Concerns from Domestic Players Over Industry Impact
However, not all industry stakeholders are aligned in support of the FTA. Amrut Distilleries Managing Director Rakshit N Jagdale expressed concern over the steep reduction in duties, calling the 75 percent cut “alarmingly” steep.“This move risks disincentivising future expansion projects within the Indian distillation sector — projects that contribute to GDP and employment across the value chain,” Jagdale warned. He added that the policy could lead to a surge in imports, potentially outpacing exports and hampering domestic manufacturing.
Long-Term Opportunities in UK Market for Indian Brands
Despite short-term disruptions, John Distilleries Chairman Paul P John expressed hope that the agreement would ultimately ease market access for Indian spirits in the UK. While it’s too early to assess specific pricing changes, he said the company is closely monitoring the FTA’s implementation to determine strategic adjustments.Premium Segment Driving IMFL Growth
Data from the Confederation of Indian Alcoholic Beverage Companies (CIABC) shows that IMFL sales grew 14 percent in FY23, reaching 385 million cases. Notably, the premium segment — defined by products priced above ₹1,000 for a 750 ml bottle — expanded 45 percent, significantly outpacing the broader market.Whisky alone accounted for 243 million cases (9 litres each) in volume sales during the same period.
Homegrown Brands Gaining Global Traction
Indian single malt labels such as Amrut, Paul John, Indri, Rampur, and Gianchand have made remarkable strides globally, even outperforming several international competitors in 2023. This momentum could be further supported by improved bilateral trade conditions and global recognition.As the industry navigates the potential challenges and opportunities posed by the India-UK FTA, stakeholders are poised for a dynamic period of transformation in both domestic and international spirits markets.
