India-UK Free Trade Agreement: A Historic Deal with Mixed Emotions

The India-UK free trade agreement will halve the duties on UK whisky and gin, further decreasing over the next decade. Industry players view it as a historic moment that will make premium international spirits more accessible in India. However, experts caution that price reductions might be limited.

The recent India-UK free trade agreement promises to overhaul the whisky market by reducing import duties, which will make premium international spirits more accessible to Indian consumers. The duty on UK whisky and gin will be slashed from 150% to 75%, eventually dropping to 40% over the next decade, placing the UK in a favorable position to capture market share in India. An official statement from the UK government underscored this strategic advantage.

The International Spirits and Wines Association of India (ISWAI), representing premium alcoholic beverage companies in India, hailed the agreement as a pivotal moment for the alcobev sector. It anticipates accelerated premiumisation, boosting related industries like hospitality, tourism, and retail, thus benefiting state revenues. Meanwhile, industry leaders like Diageo India and Chivas Brothers have also praised the deal, recognizing its potential to revitalize bilateral trade and widen consumer choice in India.

Despite the potential benefits heralded by industry figures, experts remain wary of the limited impact on consumer prices, citing that most taxes are imposed at the state level. Additionally, there's concern about the domestic market's potential vulnerability to imported scotch whiskies overshadowing local brands. Calls for implementing a minimum import price on bottled-in-origin products have been made to safeguard the indigenous market.

(With inputs from agencies.)