The Indian drinkers have become the toast of commercial agreements. With a rapidly growing alcoholic beverage market in India which now also includes a considerable premium segment while the Indians are bringing more and more expensive brands, other countries are looking for access with lower duties. Thursday India and the United Kingdom have signed a historic free trade (FTA) agreement which is intended to reduce the average rates on the goods of the United Kingdom from 15% to 3%, while Indian exporters will benefit from the almost total tariff elimination of about 99% of the product lines, covering almost 100% of the commercial value.An important part of the FTA India-Uk is whiskey. ALS half of the importing indications on whiskey and Gin produced by the United Kingdom from 150% to 75% at the beginning, followed by a further 40% reduction within a decade.
In February, India cut the duty on importing American Bourbon whiskey at 50% from 150% while heated himself to negotiate a mega commercial agreement with the United States. The reduction of the customs duty on whiskey Bourbon was informed shortly before the interviews of Prime Minister Narendra Modi with the President of the United States Donald Trump. A few years ago, under a commercial pact of the provisional pact with Australia, the tariffs on Australian wines at the price greater than $ 5 per 750 ml bottle were 100% cut from 150%, with a 50% reduction in 10 years, while for bottles exceeding $ 15, the rates dropped to 75%, with a 25% target in decade. The world encourages the Indian drinkers as their number will grow and an increasing economy increases the consumption of liqueurs.
Indian drinkers are a growing tribe
The alcoholic beverage market of India is a large and rapid growth sector. It is the largest third on a global level and the second largest for spirits. It is estimated that the market is worth $ 52.4 billion, with an expected Cagr of 7.7 percent from 2025 to 2032 Scotch Whiskey is only 2.5 percent of the total whiskey market. According to the Scotch Whisky Association (SWA), India has regained its position from France, as the number one whiskey scotch market in the world, with 192 million bottles exported in 2024, against 167 million bottles in 2023.With 100 million people who should enter the age group for the legal consumption of alcohol in India in the next five years, most of the global companies have the country among their three main priority markets. For Diageo and PernoD Ricard, two of the largest spirits in the world, India is their largest market in terms of volumes. More than half of the top 20 most consumed whiskey brands in the world are Indians, according to the latest Drinks International report.
How will the India-Uk FTA impacts Indian whiskey market?
The prices of the Scottish whiskey will surely drop through the whole country when ALS comes into force next year. The Society of Alcoholic Drinks of Ricard India Alcoholic Drums had declared in May that a reduction in liqueur prices imported following the implementation of ALS in India-UK will result in a lower number of retail prices in most states. “In particular, the ALS should improve access to the Scottish premium whiskey making them at more competitive prices, since the reductions in the import tasks on the products originally in the bottle will be translated into lowest retail prices in most states,” a spokesman for the Pri said.
“These price reductions will be for the benefit of Indian consumers, despite having a minimum impact on the foreign Indian liqueur, which remains at a significantly lower price,” said the spokesperson.Customs duties represent about 20% of the scuffal price for scotch tape, with state taxes, production and marketing costs that contribute to the rest. “The ALS will bring to better prices on the bulky whiskey for India, opening the market for the new whiskey brands in the United Kingdom and exposing Indian consumers to relatively smaller Scottish brands and barrels of Scottish whiskey. We believe that the price of scotch consumption could drop by at least 20-22%, but this will depend largely on local taxes and the way companies work on their calculations.” A sector expert said. In India, liqueur retail prices are controlled by policies of their respective state governments. They identify the duty to import as a separate component of the retail price in their respective areas.
An official of the government had told PTI that dice concessions to the importance granted to the Scottish whiskey will not have a significant impact on the internal market, since the reductions will be gradually implemented for a period of 10 years.
According to the body of the IWSR sector, some commentators in the sector suggest a drop of up to 30% of the On-Shelf prices, although realistic savings are probably about 10% for the scotch of origin in the bottle (bio). In addition, the savings will not be evident in all states and may not be transmitted to the consumer, at least not in the short term. “The ALS, as far as it is currently known, does not remove any of the bureaucratic extensives that characterize the fact of doing business in the Indian alcohol market. For example, brands and labels will still have to register annually by state, with the license costs paid. There are opportunities, but they will not necessarily be easier to access”, Jason Holway, senior research consultant at Iwsr et in May.
The Indian distillers of Whiskey Premium provide that the service of service on Scottish imports pursuant to the free trade india-UK agreement will contribute to improving their margins and accelerating growth. A lower customs duty on the bulk scotch tape, used by many foreign liqueurs companies (IMFL) made by mixing, will reduce costs and make the spirits premium cheaper in the Indian market.
However, the lowest import tasks on imported scotch tree can challenge local liqueurs brands in the premium and luxury space. Companies fear that cheapest Scotch can erode the market share of the Indian manufacturing premium liqueur. But not everyone is losing. United Spirits, the largest liqueurs of India and part of the Global Diageo Group, could emerge as a great winner of this agreement. This is because 32% of its sales already come from luxury and premium brands, many of which are imported Scottish in the bottle of origin (bio).
(With agency input)
Be First to Comment