A multi-billion-pound landmark free trade agreement (FTA) has been announced by India and the UK. For the drinks industry, it will mean lower Indian tariffs with a reduction from 150% to 75% for Whisky and Gin, before reducing it further to 40% by year ten of the deal.
The deal is expected to increase bilateral trade by £25.5 billion, UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run. UK businesses will gain a competitive edge over international competitors when entering India’s enormous market as it gets even bigger, forecasted to become the 3rd largest global economy within three years.
Exporting to this huge market will be easier than ever before thanks to India agreeing to release goods as quickly as possible after arrival at customs, work with the UK on one streamlined portal for trade and publish customs procedures and laws online in English. In addition, new digital commitments will support electronic contracts and transactions. These changes could particularly support small and medium-sized businesses, making it easier for them to enter the Indian market.
Mark Kent, Chief Executive of the Scotch Whisky Association (SWA) commented that “the UK-India free trade agreement is a once in a generation deal and a landmark moment for Scotch Whisky exports to the world’s largest whisky market. It shows that the UK government is making significant progress towards achieving its growth mission, and the Scotch Whisky industry looks forward to working with the UK and Indian governments in the months ahead to implement the deal, which would be a big boost to two major global economies during turbulent times. “
“The reduction of the current 150% tariff on Scotch Whisky will be transformational for the industry, and has the potential to increase Scotch Whisky exports to India by £1bn over the next 5 years, creating 1,200 jobs across the UK.”
“It will also give discerning consumers in India far greater choice of brands, as more SME Scotch Whisky producers have the opportunity to enter the market.”
India is the top export market by volume for Scotch whisky already, albeit with a small volume share in the overall India domestic market and plenty of scope to grow further, especially with a decrease in the Indian tariffs.
For Reference:
Press Release – UK concludes trade deal with India
- FTA economic impacts: DBT Technical Note: The preliminary economic impacts of the UK-India Free Trade Agreement
- India forecast to become the 3rd largest global economy within three years: IMF World Economic Outlook April 2025
- India is the fastest growing economy in the world: IMF World Economic Outlook April 2025
- India and the UK are the fifth and sixth largest economies: IMF World Economic Outlook April 2025
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