India–UK FTA Expected to Strengthen India’s Premium Alcoholic Beverage Industry
The India–UK Free Trade Agreement (FTA) is expected to become a landmark development for India’s alcoholic beverage industry by reducing import duties on UK whisky and gin while creating fresh opportunities for Indian manufacturers. According to the International Spirits and Wines Association of India (ISWAI), the agreement will not only improve consumer choice but also support premiumisation, investment and long-term growth across the Indian Made Foreign Liquor (IMFL) sector.
Under the agreement, the current 150% customs duty on imported UK whisky and gin will be reduced to 75% when the FTA comes into force and will gradually decline to 40% over the next ten years. ISWAI believes this phased reduction will help create a more balanced and globally competitive alco-beverage market in India.
Consumers and Indian Manufacturers Stand to Gain
ISWAI CEO Sanjit Padhi said the agreement is much more than a tariff reduction and should be viewed as an economic opportunity for all stakeholders. The association highlighted three key benefits:
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- Greater access to premium international whisky and gin brands.
- Improved availability of competitively priced bulk Scotch for Indian IMFL manufacturers.
- Moderate retail price relief for consumers if the duty benefits are passed on through the supply chain.
According to ISWAI, in Maharashtra the reduction in customs duty could lower retail prices of eligible imported Scotch whisky by around 12–13%, provided there are no additional state-level taxes or regulatory measures that offset the benefit.
Bulk Scotch Imports to Help Indian IMFL Sector
One of the most significant advantages of the FTA is for Indian liquor manufacturers. ISWAI noted that nearly 79% of India’s Scotch whisky imports consist of bulk Scotch, which is blended with Indian spirits to produce premium IMFL brands.
Lower import duties on bulk Scotch are expected to reduce production costs, improve product quality and strengthen the competitiveness of Indian whisky brands in both domestic and export markets.
ISWAI Seeks Stable State Taxation
The association also urged state governments to retain the existing taxation framework for bottled imported spirits. ISWAI argued that imported alcoholic beverages already face customs duty along with state excise, VAT and other levies, resulting in an overall tax burden comparable to premium domestic brands.
The organisation maintained that discussions on taxation should consider the entire tax structure instead of focusing on individual levies, as imported spirits do not enjoy any significant overall tax advantage in most states.
Consumer Choice and Premiumisation to Drive Market Growth
ISWAI believes the India–UK FTA will encourage premiumisation across India’s alcoholic beverage industry by expanding consumer access to international brands while simultaneously supporting domestic whisky manufacturers through better-quality imported inputs.
The association added that if implemented effectively, the agreement can generate higher investments, stronger manufacturing capabilities, improved exports and sustained revenue growth, reinforcing India’s ambition to become a globally competitive alco-beverage market.
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