The revised tariff structure will apply to both Bottled-in-Origin (BIO) and bulk imports used for making Bottled in India (BII) products, as well as blending with Indian Made Foreign Liquor (IMFL)
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The India-UK Free Trade Agreement (FTA) has halved import duties on Scotch whisky and gin. The alcohol industry has welcomed the move as a big opportunity to grow the premium spirits market, improve accessibility to BIO spirits, and boost global collaboration. Most Indian whisky producers import Scotch in bulk to blend with local spirits, so the reduced duty will mainly improve their profit margins. However, experts say big price cuts for consumers are unlikely, with state taxes and wide pricing gaps potentially limiting any drop in retail prices.
Under the FTA, the Total Customs Duty on imported alcoholic spirits, limited to whisky and gin from the UK, will be halved at the first stage to 75 per cent from 150 per cent, followed by a progressive reduction to 40 per cent over the next decade. The revised tariff structure will apply to both Bottled-in-Origin (BIO) and bulk imports used for making Bottled in India (BII) products, as well as blending with Indian Made Foreign Liquor (IMFL).
Jean-Etienne Gourgues, Chivas Brothers Chairman and CEO, expressed that the signing 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 its Scotch whisky brands, such as Chivas Regal and Ballantine’s. The deal will support long term investment and jobs in its distilleries in Speyside and bottling plant at Kilmalid, and help deliver growth in both Scotland and India over the next decade.
Abhishek Khaitan, Managing Director, Radico Khaitan, said that the company, one of the largest importers of Scotch whisky, anticipates cost advantages from this development.
“We have estimated our scotch requirements valued at over ₹250 crore in FY26, and this treaty represents a substantial opportunity for value creation. The reduction in import duties will enhance consumer access to premium international spirits and enable Indian companies to strengthen cross-border collaborations. The agreement is a win-win, empowering Indian enterprises to elevate their global competitiveness while showcasing India’s innovation on the world stage,” he said.
The UK FTA has emerged as a positive for the Scotch whisky segment, enhancing accessibility and affordability for Indian consumers. For import-driven portfolios, this could fast-track category adoption, bring price parity closer to IMFL, and enable deeper reinvestment into consumer-building efforts.
“The benefit will depend on how quickly the duty reductions are implemented and whether the States align their tax structures accordingly. As a BIO brand, Dram Bell stands to benefit from a more favourable pricing structure, and this could significantly accelerate its relevance and reach in the Indian market,” said Debashish Shyam, Co-founder and Director of Ardent Alcobev, the company behind Dram Bell Blended Scotch Whisky.
Expand market opportunities
The immediate tariff reduction on Scotch whisky and gin imports will open up and expand market opportunities for the industry, said Sanjit Padhi, CEO, International Spirits and Wines Association of India (ISWAI), whose members include global giants like Bacardi, Diageo-United Spirits, and Pernod Ricard.
The deal is said to benefit Indian consumers, as premium international spirits will become more accessible, accelerating the ongoing trend of premiumisation. It will also stimulate growth across ancillary sectors like hospitality, tourism, and retail, while potentially increasing revenue for Indian States.
He explained, “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.”
According to ISWAI, India sells over 400 million cases of Indian alcoholic spirits annually. Yet imported spirits — BIO and Bulk Bottled in India, account for only 2.6 per cent of the total market. The imported category is dominated by whisky, with Scotch being around 81 per cent of the overall imports of 10.9 million cases of spirits.
The reduction in import tariffs will benefit IMFL manufacturers, as 79 per cent 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.
However, there may be other likely impacts of this customs duty reduction on the Indian whisky market. Liquor industry expert Vinod Giri commented that consumer prices for imported Scotch may not change much.
“Most taxes on alcohol sit in States, and even if all customs duty reduction is passed on, the impact on consumer prices of imported Scotch whiskies will be in the range of ₹100-300 per bottle. Since price segments in whisky are currently too wide, this reduction will not win any new consumers. Companies are likely to pocket the savings.”
Reduction in customs duty will help the bottom lines of Indian whisky producers who import Scotch whisky for blending with domestic whiskies.
He added that over the next few years, the BII Scotch whisky category, where Scotch is imported in bulk for bottling locally, may be replaced by direct imports. With falling customs duty, companies producing in Scotland at a lower cost and exporting to India instead of running a bottling plant in India may make more commercial sense.
“Since the UK itself is not a major whisky market, the gains to Indian manufacturers may be limited. Stripped off all the noise, all the UK-India FTA will do for the whisky industry is help the bottom lines of companies. Consumers should not expect many changes. FTA will neither dramatically change the Indian whisky market nor open new vistas for Indian producers,” Giri highlighted.
Published on July 24, 2025
