As a volume market, India was behind France, the US, Spain and Singapore, with exports estimated at 55.96 million bottles of 700 ml each, though the growth rate appeared to have declined from 40% in the previous year. In comparison, exports to the largest market, France, were pegged at 205.26 million bottles, while the US continued to be the biggest market by value with exports at 655 million.
India's market for spirits is estimated at around 270 million cases, about 12% of the global market size, and has been growing at a average rate of 15% over the past five years. Rising disposable incomes have also meant that consumers are making the shift to more premium drinks, a trend seen across emerging economies. While whisky accounts for nearly 56% of the country's spirits market, Scotch is still a niche segment of some 1.6 million cases annually.
Last June, India formally recognised the Geographical Indication of Origin (GI) status granted to Scotch whisky as a product that can only be made in Scotland.
India is a priority for this year. We are hopeful a Free Trade Agreement can be signed, which will lead to a reduction in the onerous 150% import tariff, said Gavin Hewitt, chief executive of the SWA, a trade association whose 56 members account for more than 90% of the production and sales of Scotch whisky. India is currently in negotiations with the Eurpoean Union (EU) for an FTA, a process that began in 2007 and which is aimed at improving bilateral trade between the two sides.
Meanwhile, Scotch makers are already tapping potential for the premium drink outside the big cities.
India has been a vibrant market and you can see a visible trend of trading up not only in the Tier-I market, but also in Tier-II and Tier-III markets. We spotted this long back, said Harish Moolchandani, CEO and MD, Beam India, which markets Teacher's Scotch Whisky, among India's best-selling labels.
The Scotch whisky market in India has been growing between 16% and 18% annually, said Moolchandani, whose firm recently launched premixed Teacher's whisky in cans in a bid to tap new drinkers.