India UK FTA raises the bar for premium whisky as distillers eye global opportunity

The India UK Free Trade Agreement is set to redraw the contours of India's premium spirits market, but leading domestic distillers believe its biggest impact will not be a flood of cheaper Scotch. Instead, they say the agreement will accelerate premiumisation, push Indian brands to compete on quality and open new export opportunities for Indian single malts that have already begun making a mark globally.

The agreement will reduce India's import duty on British whisky and gin from 150% to 75% initially, before bringing it down to 40% over the next decade. While that is expected to make imported Scotch more accessible, industry executives argue that retail prices are unlikely to fall in proportion because customs duty is only one component of the final price consumers pay.

"The India UK FTA is expected to have a positive long term impact on the Indian alcobev industry by making the market more competitive and dynamic," said Paul P. John, chairman of John Distilleries. He noted that state excise duties, VAT, distributor and retailer margins, and logistics continue to account for a significant share of the final retail price.

For domestic players, the larger opportunity lies beyond India.

John said the agreement could strengthen exports by leveraging India's cost advantage in producing premium single malts while maintaining international quality standards. "With Indian single malts already gaining global recognition, the agreement is expected to further enhance the visibility of Indian whisky on the world stage," he said.

Premiumisation, not price competition

Industry executives largely agree that the FTA will deepen consumer interest in premium spirits rather than disrupt the market through aggressive pricing.

Sanaya Dahanukar, general manager for growth and innovation at Tilaknagar Industries , said Indian consumers have become increasingly willing to experiment with different whisky styles and flavour profiles over the past few years.

"Greater access to premium international spirits will only accelerate that trend," she said. "For whisky in particular, that is likely to make the category more dynamic rather than more competitive." According to Dahanukar, Indian single malts, pure malts and premium blends have already broadened consumer preferences, encouraging a deeper appreciation of quality and flavour.

A bigger stage for Indian whisky

Prem Dewan, chairman and managing director of DeVANS Modern Breweries, echoed that view, saying the FTA would expand the overall premium whisky market instead of merely shifting market share.

"Indian single malts have established themselves as world class products over the last few years, winning prestigious international awards and earning the confidence of consumers across global markets," he said. While imported brands may gain greater visibility, quality conscious consumers would continue to value Indian products for their craftsmanship and value, he added.

Executives also expect greater collaboration between Indian and international brands as trade relationships deepen.

"The opportunity goes both ways," Dahanukar said. "Indian consumers will gain access to a wider range of international brands and styles, while Indian spirits will also have a greater opportunity to build visibility and credibility on the global stage."

Dewan, however, cautioned that genuine reciprocity would be essential. While tariff reductions are welcome, he said non-tariff barriers, including regulatory and maturation requirements in the UK, continue to restrict easier market access for Indian spirits.

At home, Dewan also called for a more level playing field, arguing that some states offer excise and tax concessions to imported liquor that are unavailable to domestic brands despite the Indian industry contributing significantly to state revenues, supporting more than 2 million jobs and over 50 lakh farmers.

For Radico Khaitan , one of India's largest Scotch importers, the agreement also brings operational advantages.

"The India UK Free Trade Agreement is a positive development for the Indian alcobev industry and marks an important step towards creating a more efficient premium spirits market," said Dilip K. Banthiya, chief financial officer of Radico Khaitan. With estimated annual Scotch imports exceeding ₹250 crore, the company expects meaningful strategic and cost benefits while supporting the continued premiumisation of the category.

Executives across companies believe competition will intensify, but not necessarily in ways that hurt domestic manufacturers.

John said bottled in origin Scotch is likely to benefit the most from lower tariffs, with more entry level imported brands also expected to enter India. At the same time, he said stronger competition would create a more level playing field and encourage quality focused Indian whisky producers to gain wider recognition.

Dahanukar summed up the industry's broader sentiment, saying consumers today are increasingly making decisions based on quality, experience and authenticity. "Both Indian and international brands will need to continue innovating and differentiating themselves. That's ultimately a positive outcome for the industry as a whole."

John Distilleries, maker of Paul John single malts, reported revenue of about ₹945 crore in FY25. Tilaknagar Industries posted FY26 consolidated revenue of ₹2,346 crore, while Radico Khaitan reported FY26 revenue of ₹₹6,050 crore, marking a 24.7% year-on-year growth.