India signed a Free Trade Agreement with the UK on Thursday — with several items now set to face reduced tariffs. British whiskey and gin producers will see their duties go down from a whopping 150% to 75% under the new deal. This will be reduced further to 40% in the tenth year of the FTA. Liquor prices are expected to fall significantly next year — once the FTA is ratified by the British parliament and comes into effect.
Whisky was the UK’s fifth-largest export product to India in 2024-25, valued at roughly $260 million. According to reports, prices are likely to fall by a maximum of Rs 300 per bottle for the premium segment. Meanwhile, Scotch brands that are bottled in India may see prices dip by Rs 100 to Rs 150. But with liquor costs in India varying from state to state — the final rates will remain dependent on the pricing mechanism of different regions.
Top UK whisky, gin brands to get cheaper
The India-UK FTA has significantly reduced tariffs on British whiskey and gin, with prices set to fall in the coming months. Alcohol rates vary widely across India as each state outlines different excise duties and VAT amounts on the sale or retail of liquor. Ex-distillery prices and levies could also be revised next year if states choose to maintain their excise collections in light of the price drop.
Karnataka currently has the highest liquor taxes in India, with an 83% cess on the actual price. The state government also introduced a 5% additional excise duty on some products earlier this year — making Bengaluru the costliest metro city for alcohol.
Domestic industry flags dumping concerns
The landmark agreement does not impose minimum import price rules on Scotch imports, which had been a key demand of the domestic industry. Many have since raised concerns about dumping — where a country or company exports products at a lower price than the domestic market rate (for the same item) in the other country.
“Though lowering of import duty on Scotch will help the domestic industry—as Scotch used to produce blended products will also get cheaper—we hope that the government will ensure that Scotch whisky and other spirits (BIO-bottled in origin) are not dumped at low import prices or routed through any other country at cheaper rates, which would hurt the YOY growth of premium and luxury Indian brands,” said Anant S Iyer on Wednesday.
The director-general of the Confederation of Indian Alcoholic Beverage Companies (CIABC) said the industry had urged the government to introduce MIP to counter this issue. However the FTA finalised on Thursday does not impose any such requirements on Scotch imports.
