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In May 2025 the UK and India announced a landmark free trade agreement that will dramatically lower Indian import duties on British whiskies and gins. At entry into force, India will cut its 150% tariff on Scotch whisky roughly in half to 75%, with further reductions staged over ten years until it reaches 40%. This long-awaited change opens the world’s fastest-growing major economy to significantly more UK spirits. India is already the largest whisky market by volume and is now the top export market for Scotch (192 million bottles in 2024). Yet imported Scotch has only a small share of India’s vast whisky category. By cutting tariffs, the deal will make Scotch and premium gin much more affordable in India, creating a once-in-a-generation opportunity for British and international whisky brands to expand their presence.
The UK–India deal will give Scotch whisky brands cheaper access to India’s rapidly growing middle class, currently the world’s largest whisky market. Early projections underline the prize: UK officials estimate the pact could boost UK–India trade by £25.5 billion a year by 2040, and industry leaders note it may add about £1 billion in Scotch exports over five years and support ~1,200 UK jobs. In short, removing the 150% import duty barrier is “transformational” for Scotch, as the Scotch Whisky Association (SWA) and leading companies have emphasized
India’s spirits market is huge, dominated by whisky (around two-thirds of all spirits). It is also expanding rapidly – by one estimate the market could reach ~$64 billion by 2028 (about +6–7% CAGR) as rising incomes and urbanization drive demand for both affordable and premium drinks. Crucially, India has an enormous middle class (forecast to reach ~250 million people by 2050) and an appetite for premium spirits. In practice, however, almost all whisky drunk in India is domestically made (often blended or malt-from-molasses) and largely sold at low price points. Imported Scotch still commands only a few percent of the total market.
For UK exporters, this gap signifies very strong upside once tariffs fall. Scotch Whisky exports to India have already been growing – up over 200% in volume over the last decade – but high tariffs have kept Scotch a niche. With the new deal, an SWA analysis notes that
“breaking down [these] barriers to trade … could open up huge opportunities for Scotch Whisky exports”.
Detailed forecasts by industry and government project that lowering Scotch duty to 40% could raise UK whisky exports to India by roughly £1 billion in five years. In addition, UK gin makers will benefit similarly, as gin duties fall on the same schedule.
The tariff cuts transform India from a high-barrier market into one far more accessible. UK alcohol marketers should treat India as a top priority growth market. Even with remaining duties, by 2040 the deal is expected to add £25.5 billion to annual UK–India trade, meaning whisky (along with cars and other sectors) will contribute substantially. For perspective, the UK shipped about £146 million of whisky to India in 2024 under the old regime; with tariffs roughly halved immediately, that sum is likely to increase as more competitive pricing unlocks new buyers.
Lower tariffs give UK and global alcohol brands a chance to reintroduce and elevate their brand stories in India. Marketing leaders should capitalize on the fact that India’s whisky drinkers are increasingly discerning and interested in premium imported labels. Indian consumers have traditionally preferred domestic blends, but recent trends and expert commentary suggest a rising taste for import brands. Industry analysts note India’s evolving middle class “will boost demand for imported whiskies like Scotch in the medium term,” even though today the market is dominated by cheaper blends.
Effective brand-building will involve tailoring to India’s culture and consumers. For example, companies can sponsor whisky-tasting events or partner with upscale bars and hotels to showcase Scotch and craft gin. Storytelling around heritage, production quality and provenance resonates well in India, where shoppers value authenticity. Digital and social media campaigns (including collaborations with local influencers) can amplify these stories. Some UK brands already invest in India: for instance, Pernod Ricard’s Chivas Brothers group (parent of Chivas Regal, Glenlivet, etc.) has a large distillery project in Maharashtra and bottling in Scotland to serve the Indian market. The trade deal only strengthens such commitments: as Chivas Brothers CEO put it,
“India is the world’s biggest whisky market by volume and greater access will be a game changer for our Scotch whisky brands”.
Global alcohol firms (Diageo, Pernod, etc.) and UK companies should use the tariff cut as a story of positive change. Messaging can emphasize that the deal will bring “quality and choice for discerning consumers”. Building on that momentum, marketers should sync their India launch plans: for example, aligning new product introductions or premium variants with the tariff reductions. Just as the Premier League and other UK cultural exports have established local offices (e.g. the Premier League’s Mumbai office) to grow fan bases, whisky brands can invest in local teams or partnerships to deepen their presence. Overall, the trade deal provides a marketing narrative – “premium UK whisky becomes more affordable” – that can help convert curious drinkers into loyal customers.
With duties slashed from 150% to 75% immediately, UK exporters will see a substantial cost reduction into India. Pricing strategy will be key. Many brands will likely pass a portion of the savings on to consumers to gain market share, while retaining some margin to fuel marketing and distribution. Even after the cuts, a 40% tariff in ten years means UK spirits will still be relatively high-priced in India (when combined with India’s domestic taxes and channel margins). But the initial drop provides room to reposition. For example, a Scotch brand sold at ₹5,000 (~£44) per bottle might be able to retail at ₹4,000 (~£35.5) after the tariff halving, or invest in promotions.
Marketers should analyze India’s price tiers carefully. The mid- and upper-premium segments (above roughly ₹3,000–₹5,000 per bottle) are growing fastest as aspirational drinkers seek luxury labels. Lower-tier blends still dominate volume, but with tariffs down, UK gins and whiskies can now target these emerging segments. It may make sense to introduce value packs or special promotions at local festivals or Diwali season, leveraging the price gap with local brands. At the same time, maintaining a premium image is important: uniformity, scarcity releases, or localized editions can keep a sense of exclusivity.
It’s also critical to monitor global competitive positioning. The UK deal gives a relative advantage over, say, Scotch from France or American bourbon, because Indian tariffs on non-UK imports remain high unless similar deals are struck. UK marketers should highlight their cost advantage (e.g. working with importers to emphasize the better price-to-quality ratio versus untariffed competitors). This advantage will grow over the decade as India’s tariffs cut 85% of British product lines to zero within ten years, making UK imports progressively cheaper than many other Western spirits still bearing full duty.
Small and medium-sized distilleries and niche gin producers will find new opportunities in India. So far, India’s 150% duty barrier kept many smaller Scotch and gin distillers out of the market. With tariffs significantly reduced, these producers can “enter the market” for the first time, says SWA’s Mark Kent. UK business and trade bodies are likely to support this: for example, trade associations often run export workshops and introduce SMEs to Indian partners. Governments (UK and India) may also facilitate trade missions and provide market intelligence for such companies.
SMEs should plan for India’s complex market entry. This means finding reliable local distributors (or joint ventures) who understand state-level regulations – since liquor sales are heavily controlled by Indian states. For instance, some states regulate retail with licensed outlets or even lotteries, so partnering with established suppliers is vital. Packaging and labeling must comply with Indian standards, and logistics should account for longer supply chains. E-commerce is growing too (in states where online alcohol sales are legal), offering an additional channel. The tariff cuts make business cases stronger, so UK and other foreign SMEs should aggressively pursue Indian registration and outreach.
Finally, trade agreements often come with export support: UK government export programs (e.g. UK Export Finance or DIT grants) may be leveraged to mitigate upfront costs for small brands. While tariffs drive headline advantage, marketers must also tackle on-the-ground access – securing shelf space and brand listing fees in large chains or airport liquor stores, and training Indian sales teams on their product’s story and tasting notes. If anything, the prospect of tariff reduction should spur companies to prepare now, so they can move quickly once the deal is ratified.
While UK exporters gain, they will face intensified competition too. Indian distillers and blenders (e.g. Amrut, Paul John, Radico Khaitan) dominate the domestic market and are themselves evolving premium offerings. Importantly, India’s own whisky brands are improving in quality – often being aged locally or even fully malt-based – and they enjoy cost leadership. Foreign brands must differentiate on heritage, taste profile, or novelty. Collaborative marketing (such as educating consumers on whisky tasting or cocktail culture) can expand overall whisky consumption, benefiting all players.
Elsewhere, the deal reshuffles global competition. For example, Irish whiskey or Taiwanese whisky still face 150% duty, so they will be at a relative price disadvantage compared to Scotch. Brands from those countries may push for their own deals with India. In the short term, UK brands should maximize their head start. Global giants should also watch for India’s other trade negotiations (e.g. with the EU or US) – the UK’s gains could be partly neutralized if other countries later secure similar access.
Across the industry, marketing leaders must keep an eye on consumer trends. Urban Indian drinkers are increasingly health-conscious and socially mobile, so brands that promote responsible drinking or tie into lifestyle (e.g. whisky clubs, bar culture) stand to win favor. Meanwhile, rural and non-urban markets represent a bulk opportunity once logistics catch up, given the scale of India’s population.
Indian consumers are showing clear appetite for premium and craft spirits. Already, local sales of premium whisky, gin, vodka and rum are rising, and cocktail bars are proliferating in major cities. The GourmetPro analysis notes India’s spirits market is moving firmly into premiumization and craft niches. In whisky specifically, younger drinkers and women are more willing to try imported single malts and aged blends, fueling niche growth. Alcohol marketers should develop India-specific consumer insights – for instance, Mumbai and Delhi trends may differ from Kerala or Karnataka due to culture and regulation.
This means adapting marketing and innovation to local tastes. Flavors or blends that were niche in the UK (e.g. Indian spice-infused limited editions) might resonate strongly. Conversely, mainstream Scotch brands can emphasize mixability for the growing cocktail scene. On-premise marketing (tastings, local events) is crucial: Indian consumers often rely on in-bar experiences to discover new spirits. Brands should also consider education campaigns about whisky categories (single malt vs blend, grain whisky, etc.) to build recognition of their products.
Long-term outlook: With sustained economic growth and a very large young population, India’s consumer demand will likely only grow. The UK–India deal paves the way, but success will depend on strategic execution. As Diageo’s CEO noted, the pact will be
“transformational for Scotch and Scotland, while powering jobs and investment in both India and the UK”.
Marketers who treat the tariff cuts as one piece of a larger engagement plan – combining sharper pricing, smarter branding, local partnerships and consumer outreach – will reap the benefits of this historic opening.
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