India-UK Whisky Trade Pact: A Double-Edged Sword?

The new India-UK free trade agreement reduces import duties on British whisky, potentially boosting trade. While it may make premium international spirits more accessible, the effect on consumer prices could be minimal. Industry insiders predict that the agreement could significantly alter the dynamics of local bottling and import practices.

The India-UK free trade agreement is set to impact the spirits market by significantly reducing import duties on British whisky. The agreement, advocating substantial tariff cuts, was signed in London and is aimed at making international premium spirits more accessible to Indian consumers.

According to an official statement from the UK government, the tariffs on whisky and gin are reduced from 150 percent to 75 percent immediately and will drop further to 40 percent in the tenth year, offering a competitive edge to UK exporters. Industry stakeholders see this as a historic move towards equitable trade, promising potential boosts in sectors like hospitality and tourism.

However, industry experts caution that the price benefits for consumers might be limited due to high state taxes. While the deal could accelerate premiumisation trends, concerns over 'dumping' and local production shifts remain prevalent. Calls for government regulation through minimum import pricing have been made to protect domestic interests.

(With inputs from agencies.)