Tag Archives: Tariff Reduction

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.

India and the UK sign landmark FTA

Leave a reply

India and the UK signed a landmark free trade agreement (FTA) on July 24^th with the aim to improve market access and boost bilateral trade by around $34 billion annually. The agreement was signed in the presence of Prime Minister Narendra Modi and his British counterpart, Keir Starmer. The agreement was signed by the Indian Commerce Minister, Piyush Goyal and his counterpart Jonathan Reynolds.

The trade deal, finalised after three years of negotiations, is expected to benefit 99% of Indian exports from tariffs and streamline the export process for British companies exporting Scotch whisky, cars and other products to India. This will also help expand the overall trade basket.

The deal is expected to increase bilateral trade by $34 billion annually, making it the most significant trade pact for the UK since leaving the European Union and the most comprehensive one India has signed. Items like the world-famous Scotch whisky, British-made cars, cosmetics and medical devices are among many other products that will become cheaper in India as the nation’s decide to lower the tariff rates.

‘Britain is open for business’ said Starmer and added ‘It is a deal that will bring huge benefits to both of our countries, boosting wages, raising living standards and putting more money in the pockets of working people. It is good for jobs, it is good for business, cutting tariffs and making trade cheaper, quicker and easier.’

He announced GBP 6 billion in investment and export between India and the UK which is expected to create more than 2,200 jobs for British workers.

India’s average tariff on UK products will drop from 15% to 3% which means British companies selling products to India from soft drinks and cosmetics to cars and medical devices will find it easier to sell to the Indian market.

Whisky producers will benefit from tariffs slashed in half, reduced immediately from 150% to 75% and then dropped even further to 40% over the next ten years – giving the UK an advantage over international competitors in reaching the Indian market, he said.

Prime Minister Modi said “This agreement is not merely an economic partnership, but a plan for shared prosperity,” adding that the UK trade agreement ensures better market access for Indian textiles, footwear, gems and jewellery, seafood and engineering goods.

“I am delighted that after many years of hard work, a Comprehensive Economic and Trade Agreement has been concluded between our two countries today,” he added.

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

Leave a reply

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!

‘Jim Beam has been crafted with unparalleled expertise for 230 years’

Leave a reply

One of the most notable recent developments in the Indian alcobev industry is the reduction of import tariffs on bourbon. In February 2025, the Indian government reduced import tariffs on bourbon whiskey from 150% to 100%, aiming to strengthen trade relations with the United States. This move is expected to make bourbon more competitively priced in the Indian market, potentially increasing its availability and boosting consumer interest. Bhavya Desai spoke with Neeraj Kumar, Managing Director of Suntory Global Spirits India, about the impact, growth potential, and more. Excerpts:

Before the tariff cut, bourbon imports into India were relatively modest, with the country importing around $2.5 million worth of bourbon during the 2023–24 fiscal year. The U.S., holding the GI (Geographical Indication) tag for bourbon, has been the primary supplier, accounting for nearly a quarter of these imports. The tariff reduction is expected to encourage more imports from American producers, enhancing their competitiveness against other international and domestic
spirits.

According to Neeraj, the reduction is well-timed, given the bourbon market’s strong growth potential in India, driven by shifting consumer preferences and a rapidly expanding alcoholic beverage industry. “Jim Beam, our leading bourbon whiskey, has seen strong double-digit growth in recent years, securing market leadership in the American whiskey category across key Indian cities. This reflects a growing appetite for bourbon among Indian consumers.”

Neeraj attributes this growth to bourbon’s versatility, which appeals to both neat drinkers and cocktail lovers, offering a unique opportunity to engage a new generation of whiskey enthusiasts. He also sees the tariff reduction as a strategic step toward strengthening trade ties between the world’s two largest democracies, supporting bourbon’s growing market presence and meeting increasing demand for premium whiskey experiences.

That said, the bourbon market in India is still relatively niche compared to scotch. While the tariff reduction is a positive step, more effort will be needed to grow the category. Neeraj acknowledges this, noting that the reduction marks a significant step toward expanding bourbon’s footprint, encouraging investment from American distillers, and improving accessibility for Indian consumers. Bourbon exports to India have already been growing at 20% annually, and the tariff reduction is expected to accelerate this trend.

Suntory Global Spirits is proud to be the custodian of the world’s #1 bourbon, Jim Beam, Neeraj emphasises. “Jim Beam has been crafted with unmatched expertise for 230 years, each bottle carrying the legacy of generations of dedication and craftsmanship. We are committed to building scale and momentum for the brand through premium experiences tailored to Legal Drinking Age (LDA) consumers, including differentiated activations centered around bourbon refreshment moments. Our ‘Jim Beam Highball’ strategy aims to deliver a refreshing and memorable drinking experience.”

Suntory Global Spirits is also looking to expand its portfolio in India, introducing more offerings under the Jim Beam label and other spirits like Maker’s Mark. The current Jim Beam lineup in India includes Jim Beam White and Jim Beam Black Kentucky Straight Bourbon Whiskeys, along with the recently launched Jim Beam Honey and Jim Beam Orange flavours — both of which have been well received by consumers and bartenders, particularly for bourbon-based cocktails.

It’s clear that Suntory Global Spirits is eager to make its mark (pun intended) and secure a larger share of the Indian spirits market. Neeraj’s enthusiasm reflects the company’s strong commitment to India as a priority market. “We are dedicated to meeting the growing demand in this market,” he says.

Jim Beam remains a major focus for the company in India, with momentum building steadily over the past two years. The launch of Jim Beam Honey and Jim Beam Orange has received a promising response from both consumers and bartenders, reinforcing bourbon’s growing popularity in India.

Globally, Suntory Global Spirits’s bourbon portfolio also includes Legent, Basil Hayden, and Knob Creek. The company continues to assess opportunities for expanding in India — though Neeraj stresses that timing will be key.

So, is local bottling on the table? Neeraj’s response is measured: “Our approach to bottling follows strict global standards to ensure the highest quality across all our brands. Each bourbon has its unique characteristics, influenced by GI norms, blending techniques, and precise recipes for seasoning, maturation, and bottling. Any decision on local bottling will be carefully evaluated to maintain the integrity and authenticity of our products and deliver the best experience to Indian consumers.”

The tariff reduction comes at an interesting time, aligning with India’s broader strategy to negotiate a comprehensive trade agreement with the U.S. — one that aims to double bilateral trade to $500 billion by 2030. Overall, the reduction in bourbon tariffs marks a significant shift for India’s alcobev market, promising greater consumer choice and a more diverse spirits industry. And perhaps, this could pave the way for a similar shift in the Scotch market too — who knows?