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India-UK FTA is Transformational for Scotch Whisky Producers: SWA

Renowned for its rich history, complex flavours, and timeless elegance, Scotch whisky has long been regarded as the pinnacle of distillation craftsmanship. The world’s love for Scotch is unmatched, more Scotch whisky is enjoyed globally than American, Japanese, and Irish whiskies combined. In 2024, Scotch whisky exports reached £5.4 billion, with an astonishing 43 bottles shipped every second to markets across the world.

Representing over 90 companies, from global spirits giants to family-owned distilleries and emerging producers, the Scotch whisky Association (SWA) is the principal voice of an industry that accounts for the vast majority of Scotch production. Its mission is clear: To secure a sustainable and thriving future for Scotch whisky.

In this interview with Ambrosia, SWA Chief Executive Mark Kent discusses the challenges and opportunities that lie ahead for the industry in India, particularly in the wake of the landmark Free Trade Agreement between the United Kingdom and India.

With the UK–India FTA set to halve the current 150% tariff on Scotch whisky when it comes into force in 2026, how does the Scotch whisky Association expect this landmark agreement to reshape export growth, market access and industry collaboration with Indian producers over the coming decade?

The UK-India free trade agreement has the potential to be transformational for many Scotch whisky producers in the coming decades. Scotch whisky’s largest export market by volume, India is also the biggest whisky market in the world, and Scotch has the potential to grow its share over the long term as the FTA comes into force. The current 150% tariff, which will halve once the deal enters into force in 2026, has been a significant barrier for many Scotch Whisky producers in accessing this important developing market.

The growth opportunities for the Scotch category in India has seen the SWA campaigning for a UK-India deal for many decades. Our current focus is on the deal coming into force, and on Scotch whisky producers—whether they are currently exporting to India, or are planning to—getting the support needed here at home, which will enable them to grow sustainably and develop their offering in what is a complex and vast market. The Indian market is already well educated in Scotch whisky and is forecast to keep growing over the coming years across multiple categories.

We anticipate that the FTA will, over time, increase diversity of choice for Indian consumers as more Scotch whisky producers enter the market. It will also boost opportunities for growing bulk exports, which are either bottled in India or used as an ingredient in Indian Made Foreign Liquor (IMFL) products, strengthening an already-established spirit of collaboration between the Scotch whisky sector and Indian producers. There is real potential for the FTA to signal an era of strategic partnership between whisky sectors on both sides, and we’ll look to collaborate further with our counterparts in India on issues that will support each of our industries.

How is the SWA working with both governments and industry partners to ensure smoother market access for Scotch in India—especially given the state-by-state regulatory complexity—and to help distillers, including smaller companies, benefit from the FTA?

Ensuring smooth market access, not just to India overall, but to individual states will be particularly important over the coming years, particularly for smaller companies for whom India is a huge and complex market. The SWA is working with Indian industry colleagues and in-market trade bodies, as well as the UK and Indian Governments, to ensure a smooth implementation of the deal that supports the needs of businesses and consumers in both markets. The UK Government have championed the Scotch whisky industry’s growth prospects through negotiations, and the implementation of the FTA will be a positive opportunity for Scotch whisky distillers to tap into the market.

Alongside business growth opportunities, the FTA has the potential to increase revenue for the Indian government at federal and state level through an increase in sales as the tariff is lowered, so it is in everyone’s interest to ensure that the deal can come into effect quickly. The SWA’s recent visits to India, in October and early November, focused on creating the building blocks and relationships for a smooth and fair implementation of the deal for both markets.

How is the SWA working to deepen Indian consumers’ understanding and appreciation of Scotch whisky while supporting both large and small Scotch producers as they introduce new expressions in a rapidly evolving market?

As the world’s largest whisky market, the Indian consumer is already very discerning, so a lot of groundwork in educating the market on Scotch is well established. While the presence of different Scotch whisky companies varies in the Indian market depending on their size and years in business, there are opportunities to grow consumers’ appreciation of Scotch as new expressions and brands are introduced to the market. As a trade body, we look to support all our members, who range from multinational companies to small independent distillers, to realise their ambitions in the Indian market regardless of scale.

The tariff reduction in the FTA will also benefit the domestic Indian industry and drive investment in India by providing greater access to bulk Scotch whisky used in IMFL products or for bottling. The growth of Indian Single Malts, both in India and the UK, is testament to the premiumisation of the Indian market, and the Scotch whisky industry is committed to working with Indian industry partners to deliver these shared opportunities. The FTA is a signal of that collaborative approach, and we want sectors on both sides to thrive as a result.

Indian whisky brands are growing rapidly, both at home and abroad. How does Scotch plan to differentiate and retain its heritage appeal in a market where Indian whiskies are gaining sophistication and global recognition?

It is really positive to see such interest in the entire whisky category in India, with Indian Single Malts also growing in popularity in the UK, and this growing appreciation can only be a good thing for the entire category. Both categories are benefiting from increased investment between the UK and India, and this will be further driven by the FTA, as well as the partnerships between the Indian and Scotch industries. As consumers in India explore the whisky category, Scotch is a natural step on the “whisky journey” due to its unique heritage, provenance and quality. Scotch whisky’s current share of the Indian whisky market is around 3%, and even as this grows over time through the implementation of the FTA, it will still retain a relatively small portion of the market. What’s exciting for our sector is the potential to increase the range of Scotch whisky brands and expressions available to the Indian consumer, which enhances the global appeal and reach of the Scotch category overall.

Sustainability is increasingly important for global consumers. How is the Scotch whisky industry integrating sustainability into its export growth strategy in India, particularly given the environmental challenges of expanding in new markets?

The Scotch whisky industry is committed to long-term sustainability from grain to glass, and our sector’s work to decarbonise our operations and supply chain run in tandem with our ambitions for growth. Ongoing dialogue with regulators here in the UK and around the world is important to ensure that the industry’s forward planning aligns with policies that address climate impact, always bearing in mind external factors such as the development of key growth markets.

How is the Scotch whisky industry working with Indian partners to explore deeper collaborations—whether in production, standards, sustainability, or tourism—and to unlock new cross-sector opportunities as the FTA opens up the market?

The Scotch whisky industry is keen to work with our colleagues in India on shared challenges and cross-sector opportunities for growth in both markets. This can include work to strengthen the definition of single malt and guarantee standards for consumers, to exploring the opportunities that a greater variety of bulk Scotch whisky can offer to Indian importers. During our recent visit to India, we met with representatives from across the Indian industry, discussing how we can continue to develop our partnerships to support sustainable growth and deliver on shared objectives, and we hope to be able to continue these conversations in Scotland next year. From driving sustainable production methods and encouraging responsible alcohol consumption, to tourism and hospitality promotional activities, collaboration should benefit and futureproof industries in both the UK and India and give consumers a greater access to the fantastic range of Scotch whiskies that the sector has to offer.

Scotch Whisky Industry Records £5.4BN Global Exports in 2024

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High taxes on Scotch whisky, specifically a recent 10.1% duty increase and a subsequent 3.65% increase, are hurting the UK alcobev industry by increasing costs for consumers and businesses, potentially leading to reduced investment and job losses, and ultimately impacting the economy. The industry argues that these tax hikes are counterproductive, leading to decreased government revenue and stifling growth.

The Scotch Whisky Association (SWA) has released global export figures that show the value of Scotch exports stood at £5.4bn in 2024. The equivalent of 1.4bn 70cl bottles of Scotch whisky were exported last year, equating to 44 per second.

The figures, released, show a decrease of 3.7% on 2023 exports by value. The Scotch Whisky Association has called on the UK and Scottish Governments to provide more support for the industry as distillers warn that the combination of pressure on consumer spending, increased domestic tax and regulation, and turbulent global trade, may continue to impact exports into 2025.

Exports by volume have increased by 3.9%, which the industry says reflects the changing trends in global consumer preferences and challenging trading environment.

India has regained its position from France as the world’s number one Scotch whisky export market by volume, with 192m bottles exported, while the United States retains its long-held position as the largest export market by value, worth £971m in 2024.

However, the whisky industry has warned that global trading conditions remain turbulent at the beginning of 2025 and have called on the UK government to do what it can to mitigate growing domestic pressures on the industry. This includes reducing excise duty on the industry, with 70% of the average priced bottle now collected in tax, reconsider the financial impact of Extended Producer Responsibility (EPR), and accelerate trade talks to reduce tariffs and market access barriers in key markets, like India.

Commenting on the export figures, Mark Kent, Chief Executive of the Scotch Whisky Association said, “Despite the resilience of the Scotch Whisky industry, 2024 has been a challenging year.

“At home, distillers are being stretched to breaking point, as consumers bear the brunt of a 14% increase on the tax on every bottle of Scotch Whisky in the last 18 months alone. The cumulative effect of inflationary impacts on input costs such as cereals, energy and shipping, and the increased tax and regulatory costs, including the substantial cost of EPR coming later this year, are being fed through to consumers when they are tightening their belts.

“Overseas, the tectonic plates of trade are shifting, and exports to traditionally strong markets in the EU and North America have become much more challenging. We continue to support UK Government to promote strong and open trade relations with key export markets around the world, and particularly to advance negotiations on FTA with India, and engage with the US Administration. The United States remains a key market for Scotch, and where the industry contributes to the US economy through direct investment and jobs.

“But support for the industry’s global success starts at home. For too long, the industry has been taken for granted, with the misguided and simplistic belief that decisions taken in Scotland and the wider UK won’t impact an industry which exports 90% of its product, supports a large local supply chain and plays a valuable part in attracting tourists to Scotland. The Scotch whisky industry is a proven driver of economic growth, jobs and investment, and needs an environment free from the shackles of excessive taxation, regulation and uncertain operating costs. The UK government must redouble its efforts to back Scotch producers to the hilt, as promised by the Prime Minister.”

These are challenging times for the beverage alcohol industry. Changing weather patterns and wildfires are affecting production of essential ingredients like grapes, barley, and hops. Many consumers are switching to low- and no-alcohol beverages. And now, tariffs.

Research by the Scotch Whisky Association (SWA) indicates that a high tax burden is causing three out of four Scotch whisky companies to either defer or shift investment away from the UK. This reluctance to invest can impact expansions, infrastructure improvements, and innovation within the industry.

Furthermore, a quarter of distillers are considering reducing headcount due to economic pressures and the current alcohol duty levels.

The industry currently supports 66,000 jobs across the UK, and any further tax increases could lead to a decline in employment within the sector and its related supply chain. High domestic taxes can make Scotch whisky more expensive compared to other spirits, both domestically and internationally, potentially impacting its competitive edge.

Tariffs already add pressure, and high domestic taxes further exacerbate this. When a 25% US tariff was imposed on single malts in 2019 (later suspended), the industry lost over £600 million in exports to the US over 18 months. This highlights how external factors, combined with domestic tax burdens, can significantly hinder export performance.

Despite duty increases, HMRC data hasn’t always shown the expected rise in spirits duty receipts. This suggests that excessive taxation can potentially discourage consumption, leading to lower-than-anticipated tax revenues, a point raised by the SWA.

While recent changes to alcohol duty have included a draught relief to support the hospitality industry, the overall duty increases can still impact the price of drinks, including Scotch whisky, in bars and restaurants. This can affect consumer spending in the on-trade sector and subsequently impact the businesses that rely on alcohol sales.

Alcohol taxes are implemented to generate revenue and address public health concerns, excessive or poorly structured taxes can have detrimental consequences for the UK alcobev industry, particularly Scotch whisky, by impacting investment, jobs, exports, and competitiveness.

ISWAI, Scotch Whisky Association and industry call FTA ‘a game-changer’

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ISWAI says Cheers to India-UK FTA as a Historic Moment
Tariff Reduction may provide Greater Choice and Access To Premium Products

The International Spirits and Wines Association of India (ISWAI), has applauded the signing of the India-UK Free Trade Agreement (FTA) calling it as a historic moment that underscores the shared commitment of both nations to strengthen economic ties and advance fair trade. ISWAI said – that for the alcobev sector, this agreement paves the way for a more balanced and equitable trade environment, particularly given that Indian alcohol exports to the UK have zero import duties.

Key Highlights
– Total Customs Duty to reduce from 150% to 75%, followed by a progressive reduction to 40% over the next decade
– Revised tariff structure to apply on both Bottled-in-Origin (BIO) and bulk imports
– India sells over 400+ million cases of Indian alcoholic spirits annually
– Scotch around 81% of the overall imports of 10.9 million cases of alcoholic spirits

Under the agreement, the Total Customs Duty on imported alcoholic spirits, limited to whisky and gin from the UK, will be halved at the first stage of entry-into-force from 150% to 75%, followed by a progressive reduction to 40% over the next decade. The revised tariff structure will apply to both Bottled-in-Origin (BIO) and bulk imports which are used for making Bottled in India (BIO) products as well as blending with IMFL.

Sanjit Padhi, CEO, ISWAI said, “The India-UK Free Trade Agreement is a historic moment in bilateral relations between the two countries and can become a trendsetter for other FTAs. ISWAI and its members welcome the deal.” Adding further, Padhi said, “For the alcobev sector, the immediate tariff reduction on Scotch whisky and gin imports from 150% to 75%, and subsequent reduction to 40% over the decade, will open up and expand market opportunities for the industry. The deal will significantly benefit Indian consumers, as premium international spirits will become more accessible, thereby accelerating the ongoing trend of premiumization. It will also stimulate growth across ancillary sectors such as hospitality, tourism, and retail, while potentially increasing revenue for Indian states. At a macro level, the agreement will leverage mutual synergies and competencies of both nations. As Indian Single Malts gain global recognition, improved market access can create mutual benefits, just as Scotch whiskies gain better accessibility in India, Indian whiskies can expand their footprint abroad.”

India, one of the world’s largest alcobev markets, which sells over 400+ million cases of Indian alcoholic spirits annually. Yet imported spirits – Bottled in Origin and Bulk Bottled in India, account for a mere 2.6% of the total market. The imported category is dominated by whisky with Scotch being around 81% of the overall imports of 10.9 million cases of alcoholic spirits.

The reduction in import tariffs will also bring a huge benefit to all manufacturers in the Indian Made Foreign Liquor (IMFL) industry as 79% of the Scotch imported into the country is in Bulk form, which is used for bottling in India and for blending by local brands of whisky in the IMFL category.

Padhi added, ‘The FTA agreement is an important step by the Government of India towards facilitating equitable market access while safeguarding domestic industry interests through a calibrated and phased approach.

SWA says FTA will bring long-term benefits

The Chief Executive of the Scotch Whisky Association, Mark Kent, said “The Scotch Whisky industry has long championed a free trade agreement between the UK and India. The signing of the FTA is an historic moment and is an important milestone to reducing tariffs on Scotch Whisky in a growing market. This will contribute to the government’s growth objective, by laying the foundations for further investment and jobs.

“The FTA will bring long-term benefits for the industry, but the industry needs immediate support in order to realise the deal’s full potential. Distillers, especially smaller ones, are under significant pressure now – including as a result of tariffs in the US and a growing tax burden in the UK.

“Action by the UK government to alleviate these pressures will ensure distillers are in the best position to take advantage of the UK-India FTA once it comes into force.”

Diageo calls it ‘great moment’

Nik Jhangiani, Interim Chief Executive, Diageo, said “This agreement marks a great moment for both Scotch and Scotland, and we’ll be raising a glass of Johnnie Walker to all those who have worked so hard to get it secured.”

Chivas Brothers says it’s a ‘Sign of Hope’

Jean-Etienne Gourgues, Chairman and CEO, Chivas Brothers said “Signature of the UK-India FTA is a sign of hope in challenging times for the spirits industry. India is the world’s biggest whisky market by volume and greater access will be an eventual game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine’s.”

The deal will support long term investment and jobs in our distilleries in Speyside and our bottling plant at Kilmalid and help deliver growth in both Scotland and India over the next decade. Let’s hope that both governments will move quickly to ratification so business can get to work implementing the deal!

Whisky industry calls on Chancellor to fulfil Manifesto Pledge to Scotch

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The Scotch Whisky Association (SWA) which conducted a poll shows that a third of the voters are less likely to support the Conservatives if the Chancellor, Jeremy Hunt increases duty, while 72% support a freeze on Scotch whisky tax in the Spring budget.

Jeremy Hunt has been urged to freeze duty to fulfil the pledge made in 2019 to “ensure our tax system is supporting Scottish whisky”. The Chancellor will use his Budget to finalise a long-awaited review of the duty system, but reports suggest whisky drinkers and producers will get nothing – and even see tax rates increase.

Per unit of alcohol, duty paid on spirits is already significantly higher than the European average, with around £3 in every £4 spent on a bottle of Scotch whisky going to the treasury as tax. A further increase to spirits duty in the budget would further add to the cost of living and fuel inflation – which the UK government has pledged to halve this year.

The poll, conducted by Survation, also shows Scotch Whisky’s crucial role in supporting the wider supply chain, with 76% believing support for the Scotch Whisky industry will boost hospitality businesses. Spirits like Scotch whisky account for 34% of sales in the UK on-trade, but 99% of distillers do not have access to proposed tax breaks in pubs and bars, known as “draught relief”.

The Scotch whisky industry already contributes more than £5.5bn to the UK economy every year. The sector supports more than 42,000 UK jobs, employing 11,000 people directly, the majority of whom are in rural communities of Scotland. More than 90% of all UK spirits production is based in Scotland, and the SWA has argued that any increase to spirits duty would put Scotch whisky distillers at a further competitive disadvantage and disproportionately impact business north of the border.

Commenting on the results of the poll, Mark Kent, Chief Executive of the Scotch Whisky Association, said, “Distillers across Scotland are waiting for the pledge made in 2019 to be fulfilled. There has been a review of alcohol taxation, but still Scotch whisky is taxed more than beer, wine or cider and 99% of distillers do not have access to tax breaks available to sales in the on-trade. The competitive disadvantage faced by the industry could get worse if the Chancellor further raises tax on Scotch whisky and other spirits in the Budget this week. We urge him to listen to people across Scotland, make good on the commitment to support Scotch Whisky, and freeze duty.”

The SWA has released the 2021 global export figures for Scotch Whisky

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Global exports of Scotch Whisky grew to £4.51bn during 2021, according to figures released recently by the Scotch Whisky Association (SWA), as the industry continues to recover from the impact of the Covid-19 pandemic and US tariffs.

In 2021, the value of Scotch Whisky exports was up 19% by value, to £4.51bn. The number of 70cl bottles exported also grew by 21% to the equivalent of 1.38bn.

Growth in 2021 was driven in particular by consumers in Asia Pacific and Latin America, with value increases of 21% and 71% respectively. Key emerging markets for Scotch Whisky – like India, Brazil, and China – grew strongly. Exports grew by 8% in the United States – the industry largest market by value – despite the first quarter of 2021 impacted by the 25% tariff on Single Malt Scotch Whisky. Exports to the European Union grew by 8% in the first year since the UK left the transition period.

Despite the return to growth in 2021, the value of Scotch Whisky exports has not recovered to pre-pandemic levels, with exports remaining 8% lower than 2019.

Commenting on the figures, Chief Executive of the Scotch Whisky Association Mark Kent said, “The global footprint of the industry in 2021 is a clear sign that the Scotch Whisky industry is on the road to recovery.

“Value and volume are both up as consumers return to bars and restaurants, people return to travel and tourism, and we all return to a degree of normality after a period of enormous uncertainty for consumers and business.

“Scotch Whisky growth in global markets means more jobs and investment across Scotland and the UK supply chain. The industry has continued to invest in its production sites, tourist attractions and workforce to ensure that Scotch Whisky remains at the heart of a dynamic international spirits market and attracts new consumers around the world.

“But this this is no time for complacency. The industry continues to face global challenges, including ongoing trade disruption, growing supply chain costs and inflationary pressures, and undoubtedly there is some road to run before exports return to pre-pandemic levels.

“The UK and Scottish governments should do all they can to support the industry’s continued recovery by making the most of global opportunities, including the ongoing UK-India trade talks, ensuring fairness in the UK duty system, and investing in a more sustainable future as the industry works to reach net-zero by 2040.”

Summary

Export value of Scotch Whisky in 2021 was £4.51bn, up £705m compared with 2020, but down £403m compared to 2019.

Export volume of Scotch Whisky in 2021 was 1.38bn 70cl bottles (equivalent), up 238m 70cl bottles compared with 2020 and up 73m compared to 2019.

On average, 44 bottles of Scotch Whisky are exported every second (up from 36 bottles per second in 2020).

Top 10 Markets

The largest export destinations for Scotch Whisky (defined by value) in 2021 were:

USA:	£ 790m	8.4% (£729m in 2020)
France:	£ 387m	2.8% (£376m in 2020)
Taiwan:	£226m	24.3% (£182m in 2020)
Singapore:	£212m	-14.3% (£247m in 2020)
China:	£198m	84.9% (£107m in 2020)
Latvia:	£156m	-11.8% (£176m in 2020)
Germany:	£148m	6.4% (£139m in 2020)
India:	£146m	42.9% (£102m in 2020)
Japan:	£133m	16.2% (£114m in 2020)
Spain:	£118m	7.9% (£109m in 2020)

The largest export destinations for Scotch Whisky (defined by volume, 70cl bottles equivalent) in 2021 were:

France:	176m bottles	-0.1% (176m bottles in 2020)
India:	136m bottles	44.3% (95m bottles in 2020)
United States:	126m bottles	12.6% (112 m bottles in 2020)
Brazil:	82m bottles	80.5% (45 m bottles in 2020)
Japan:	56m bottles	25.9% (45 m bottles in 2020)
Spain:	48m bottles	32.0% (36 m bottles in 2020)
Mexico:	48m bottles	13.0% (42 m bottles in 2020)
Germany:	46m bottles	7.2% (43 m bottles in 2020)
Poland:	45m bottles	19.4% (37 m bottles in 2020)
Russia:	42m bottles	40.7% (30 m bottles in 2020)

Regional data

In 2021, Scotch Whisky exports by global region (defined by value) were (% change vs 2020):

European Union:	£1360m	8.2% (30% of global exports)
Asia Pacific:	£1210m	21.4% (27% of global exports)
North America:	£1000m	11.2% (22% of global exports)
Central and South America:	£443m	70.7% (10% of global exports)
Middle East and N Africa:	£187m	55.0% (4% of global exports)
Africa:	£157m	14.6% (3% of global exports)
Western Europe (ex.EU):	£98m	6.0% (2% of global exports)
Eastern Europe (ex.EU):	£47m	33.8% (1% of global exports)

SWA announces Mark Kent as new Chief Executive

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The Scotch Whisky Association (SWA) has announced that Mark Kent, former British Ambassador to Argentina, will succeed Karen Betts as Chief Executive, when Karen leaves the SWA later this year.

Mark joins the SWA following more than three decades with the Foreign, Commonwealth and Development Office (FCDO). Most recently, he served as Ambassador to Argentina from 2016 to June 2021. He also served as the Ambassador to Thailand, Ambassador to Vietnam, as well as roles at British Embassies in Mexico City, Brasilia and the UK Representation to the European Union.

Commenting on his appointment as the ninth Chief Executive in the SWA’s 110-year history, Mark Kent said, “I am delighted to have been appointed as CEO of the Scotch Whisky Association. As a former Ambassador, I know in what high regard the Scotch Whisky industry and the SWA is held worldwide.

“After a challenging period, I’m looking forward to helping the industry to unleash its full potential and enable people across the globe to discover and enjoy our premium and iconic product. The Scotch Whisky industry has a fantastic history, great stories to tell and continues to innovate. I can’t wait to get started.”

Welcoming Mark Kent to the role, Scott McCroskie, Chair of the SWA Council, added, “I am delighted that Mark will be joining the Scotch Whisky Association, to lead the organisation’s and the industry’s next exciting chapter. Mark brings with him an outstanding depth of experience which will allow the SWA to continue to support the industry’s interests around the world.

“We look forward to working with him as the industry looks to make new ground in key growth markets and build a sustainable future for the industry by continuing our push towards net-zero.”

Mark Kent, who will take up the position in January 2022, will take over from Karen Betts, who leaves the SWA in December 2021 to take over as Chief Executive at the Food and Drink Federation.