The International Spirits and Wines Association of India (ISWAI), the premier organization representing major premium alcobev corporations across the country, on Wednesday welcomed the official roll-out of the India-UK Free Trade Agreement. The apex body hailed the pact as a transformative milestone poised to supercharge bilateral commerce, foster robust sector development, and open up massive avenues of growth for the domestic alcoholic beverage market.
As the trade deal takes effect, the planned tariff cuts on Scotch whisky imports arriving from the UK—encompassing bulk Scotch earmarked for local bottling and blending operations—are anticipated to generate immense economic value across the entire spirits ecosystem.
In a statement, ISWAI said that this move will simultaneously broaden options for consumers and bolster the ongoing premiumization trend sweeping through the Indian marketplace.
Sanjit Padhi, CEO, ISWAI, said in the statement: "ISWAI and its members welcome the implementation of the UK-India FTA as a landmark development for the alcobev sector. The coming into force of the agreement and the resulting tariff reductions offer significant strategic benefits for both countries. India's increasingly aspirational and discerning consumers will now have greater access to premium international brands at more accessible prices. "
"This enhanced choice will elevate the consumer experience and support growth across related sectors such as tourism, hospitality and retail. Importantly, the reduction in duties on bulk Scotch imports will also benefit India's domestic spirits industry by lowering input costs for bottling and blending operations, enabling manufacturers to enhance product quality and competitiveness,” Padhi added.
India remains a global alcobev powerhouse, commanding annual sales of over 400 million cases of spirits, though imported varieties currently capture a minuscule 2.5% market share. Within this imported segment, whisky reigns supreme; Scotch alone constitutes roughly 81% of the 9.9 million total cases of spirits brought into the country.
Padhi also said: “We anticipate that the implementation of the agreement will further accelerate the ongoing trend of premiumization within the alcobev sector, positively impacting the state revenues. Therefore, we see this agreement as a win-win for all stakeholders in the alcobev sector. It reflects the shared commitment of India and the UK to deepening economic ties and advancing fair, balanced trade."
The lowering of import barriers is also set to directly uplift local manufacturers of Indian Made Foreign Liquor (IMFL), given that 79% of all imported Scotch enters India in bulk form to be blended and bottled by homegrown labels. ISWAI noted that this strategic tariff rationalization will empower IMFL producers to significantly elevate the quality of their "Made in India" offerings, sharpening their competitive edge internationally and ultimately driving up India's export volumes.
Following these positive structural shifts, financial brokerage Nuvama Institutional Equities announced it has sustained its "BUY" recommendation for shares of prominent market players United Spirits, Radico Khaitan, and Allied Blenders.
Nuvama Institutional Equities' Abneesh Roy said it is “positive for all liquor Companies especially Spirits companies.” It’s “been long awaited and hence a positive, it will lead to improvement of margins and volumes”
Roy noted: “Twin benefits: RM cost of scotch gets cheaper and end product if imported also can be made more affordable driving volume scale up.”
