Global Scotch whisky producers are eagerly eyeing India after New Delhi and London concluded their long-awaited free trade agreement (FTA), as lower tariffs are set to propel sales in the world’s largest market for the popular alcoholic drink.
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Finalised last month, the deal will lead to India halving its levy on British whiskies and gin from 150 per cent to 75 per cent starting from the middle of next year, and reducing it further to 40 per cent over a 10-year period.
While this could make imported Scotch whiskies much more accessible to Indian consumers, analysts and industry insiders say foreign distillers will still face stiff competition from increasingly sophisticated domestic brands.
India currently accounts for just three per cent of global Scotch whisky sales by volume, despite being the top export destination for the product. The UK is India’s largest whisky trading partner both in value and volume terms, according to Indian government data.
“India’s alcoholic drinks market is at a crossroads, combining strong demand for home-grown products and rising interest in high-quality imported premium products,” said Sanjit Padhi, chief executive of the International Spirits and Wines Association of India.
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The new FTA could expand consumer choices, enhance quality benchmarks, and create a level-playing field benefitting domestic and international players, Padhi said.