Cheaper Scotch is only half the FTA story

Published 24 July 2026 · india

Live Events Premium Scotch to get cheaper Indian single malts unfazed No price war expected Bulk Scotch may be the bigger winner State taxes remain

Live Events Premium Scotch to get cheaper Indian single malts unfazed No price war expected Bulk Scotch may be the bigger winner State taxes remain the biggest variable A premium market gets more competitive as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India's premium whisky market could be headed for one of its biggest structural shifts in years after the India-UK Free Trade Agreement (FTA) halved import duties on Scotch whisky and gin. Distillers and industry bodies expect the deal to lower prices for imported labels, widen consumer choice and intensify competition in the premium segment.The agreement, which came into force earlier this month, immediately reduces customs duty on Scotch whisky and gin to 75% from 150%, with tariffs set to decline further to 40% over the next decade. While the move is expected to make imported Scotch cheaper, industry executives say consumers should not expect dramatic price cuts immediately, as state excise duties, VAT, logistics costs and distributor margins continue to account for a significant portion of retail prices.Instead, the FTA is expected to accelerate the country's ongoing premiumisation trend while raising the quality benchmark for domestic producers.India, the world's largest whisky market by volume, sold about 259 million nine-litre cases of whisky in 2024, according to industry estimates cited by the Confederation of Indian Alcoholic Beverage Companies (CIABC). Whisky accounts for roughly two-thirds of India's spirits market, making even modest changes in pricing and consumer preferences significant for the industry.India was already the world's largest market for Scotch whisky by volume before the India-UK free trade agreement came into force. According to the Scotch Whisky Association (SWA), exports of Scotch to India reached a record £248 million in 2024, equivalent to about 192 million 70cl bottles, making the country the biggest overseas market by volume but only the fifth largest by value.The gap reflects India's long-standing demand for lower-priced Scotch, much of it used for blending by domestic distillers, even as premium bottled Scotch remained constrained by the country's 150% import duty before the FTA.Rakshit Jagdale, Managing Director of Amrut Distilleries, expects retail prices of imported premium Scotch to fall meaningfully."What I strongly feel is that premium and luxury Scotch whisky prices will drop, MRP will drop.

My personal opinion is that anything between 15 to 20% will be the drop," Jagdale told ET Online."It will benefit Indian distillers who are importing blended malt Scotch to add to their mix in blended whisky. So, that will be a benefit to Indian distillers."Industry body International Spirits and Wines Association of India (ISWAI), however, estimates somewhat lower retail savings.Using Maharashtra as an example, ISWAI projects that a 750 ml three-year-old blended Scotch priced at Rs 2,500 could become around 12% cheaper, while a 12-year-old blended Scotch retailing at Rs 4,250 may see a 13% reduction, provided companies pass on the entire benefit of lower import duties to consumers."The India–UK Free Trade Agreement is a strategic opportunity—not merely a tariff milestone—and policy decisions must stay focused on the broader economic dividends for all stakeholders, especially consumers," said Sanjit Padhi, CEO, ISWAI."This agreement delivers three distinct benefits: Greater consumer choice, unlocking access to a wider range of premium global brands, improved access to bulk Scotch for domestic producers and modest price relief for consumers."Despite concerns that cheaper Scotch could threaten India's fast-growing single malt category, domestic producers appear confident.The tariff cuts also come at a time when India's homegrown single malt industry has emerged as a formidable challenger to imported Scotch.Industry estimates from the Confederation of Indian Alcoholic Beverage Companies (CIABC) show the country's single malt market stood at about 675,000 nine-litre cases in 2023, with Indian brands accounting for roughly 345,000 cases, over 50%, overtaking imported Scotch and other international single malts, which sold about 330,000 cases.Jagdale believes Indian single malts have already established themselves on quality."Indian single malt whisky has already carved out a niche for itself within the spirits category in India. Yes, there is some sort of apprehension that cheaper Scotch, cheaper single malt Scotch will be available, but if you look at quality perspective and parameters, they are equal or better than the standard 12-year-old Scotch single malt," he said.Piccadily Distilleries, maker of award-winning Indri, echoed the sentiment."The India–UK FTA is likely to be a defining moment for India's premium whisky market, but not in the way many initially expect," the company said in its response to ET Online."While the reduction in import duties on Scotch will certainly make premium Scotch more accessible over time, we believe the bigger impact will be on consumer behaviour rather than market disruption."The company argued that the agreement would accelerate premiumisation rather than trigger aggressive price competition."Consumers will have greater access to globally renowned Scotch brands, leading to a more educated and discerning whisky drinker.