The India-UK FTA has reduced customs duties on Scotch whisky, offering significant cost advantages to Indian premium whisky makers like Radico Khaitan, Allied Blenders & Distillers, and John Distilleries. These companies expect better margins and accelerated growth due to lower input costs.
New Delhi: Indian premium whisky makers are hopeful that duty concessions on Scotch imports under the recently signed India-UK free trade agreement (FTA) will help improve their profit margins and fuel growth. The deal, which cuts customs duties on UK whisky and gin from 150% to 75% immediately, and to 40% over the next decade, is expected to make premium spirits more affordable in the world’s largest whisky market.
Homegrown players like Radico Khaitan, Allied Blenders & Distillers (ABD), and John Distilleries see this as an opportunity to broaden their portfolios and offer Indian consumers a greater variety of high-quality spirits. Radico Khaitan, for instance, plans to import Scotch malt worth Rs 250 crore in FY 2025-26, with its MD Abhishek Khaitan calling the FTA a “significant cost advantage.” The company, known for its award-winning single malt ‘Rampur’ and Jaisalmer Indian Craft Gin, expects the reduced duties to lower input costs and improve profitability.
Allied Blenders & Distillers, makers of Officer’s Choice Whisky, also welcomed the move, noting that it would make premium spirits more accessible to Indian consumers. “This agreement will benefit ABD’s super-premium to luxury portfolio by making these products more accessible,” the company said in a statement. The reduced import duties could allow more competitive pricing, opening new avenues for collaboration with international brands.
Concerns over impact on local industry
However, not all industry players are convinced. Amrut Distilleries MD Rakshit N Jagdale raised concerns about the steep duty reductions, warning that they could hurt India’s domestic alcohol industry by disincentivizing future expansion projects. “This move risks disincentivising future expansion projects within the Indian distillation sector – projects that not only contribute to manufacturing GDP but also generate significant direct and indirect employment across the supply chain, from agriculture to retail,” he said.
John Distilleries Chairman Paul P John echoed similar sentiments, noting that while the FTA could ease market access for Indian brands in the UK, the impact on domestic sales remains uncertain. “At this stage, it’s premature to comment on specific pricing strategies. We are monitoring the developments of the India-UK FTA and will assess the implications once the details are finalised,” he said.
Market growth and changing consumer preferences
According to the Scotch Whisky Association, India was the largest market for Scotch by volume in 2024, importing 192 million bottles. However, in value terms, it ranked fourth, with exports worth 248 million British pounds. Meanwhile, the Confederation of Indian Alcoholic Beverage Companies (CIABC) reported that sales of Indian Made Foreign Liquor (IMFL) grew 14% by volume to 385 million cases in FY23, with premium products priced over Rs 1,000 per 750 ml bottle growing over three times the industry average to 45%.
Single malt brands like Amrut, Paul John, Indri, Rampur, and Gianchand have also seen significant growth, with some even surpassing global brands in recent years. However, industry leaders warn that without balanced trade policies, the surge in Scotch imports could overshadow these local success stories.
(Based on PTI inputs)
