UK-India trade deal ‘transformational’ for Scotch whisky market
The newly-announced trade deal between the UK and India has been lauded as “transformational” in opening Scotch up to the world’s largest whiskey market.
Under the terms of the deal, the UK’s 150 per cent tariff on Scotch Whisky will be halved to 75 per cent, with the potential for further reductions in the coming years.
Chief of the Scotch Whisky Association (SWA), Mark Kent, called it a “once in a generation” deal and “landmark moment for Scotch Whisky”.
Kent said the agreement had the potential to increase Scotch Whisky exports to India by £1bn over the next five years and to create 1,200 jobs across the UK.
“The deal is good for India too, boosting federal and state revenue by over £3bn annually, and giving discerning consumers in a highly educated whisky market far greater choice from [small and medium] Scotch Whisky producers who will now have the opportunity to enter the market,” Kent added.
India is the largest whisky-drinking market in the world, consuming almost half of all whisky consumed globally.
‘A huge achievement’
Its market currently consists of cheaper blended whiskies, but analysts have suggested its growing middle class will boost demand for imported whiskies like Scotch in the medium term.
Scotch Whisky had a two per cent share of the total Indian whisky market in 2024, although this figure is certain to rise as the lower tariffs filter into lower prices.
Diageos’s chief executive, Debra Crew, said the trade deal was a “huge achievement”.
“All of us at Diageo toast their success,” Crew said. “It will be transformational for Scotch and Scotland, while powering jobs and investment in both India and the UK.”
“The deal will increase quality and choice for discerning consumers across India, the world’s largest and most exciting whisky market,” Crew said.
In its latest half-year results published earlier this year, Diageo reported a seven per cent fall in reported net Scotch sales and said low sales contributed to an overall four per cent in spirits sales.
Johnnie Walker net sales, in particular, declined 13 per cent due to “scotch category weakness”, Diageo said.
The full deal, which includes a social security pact for Indian workers as well as lower tariffs on some alcohols and cars, has been lauded as a major win for Prime Minister Keir Starmer.
“This deal will cut tariffs, boost growth, and create jobs. It shows that even in a tough global economic climate, the UK can be the grown-ups in the room—and turn uncertainty into opportunity, in stark contrast to Trump’s approach,” Marley Morris, associate director for trade at IPPR, said.