Pic : Johnnie Walker (Twitter) 
Special 
Pic : Johnnie Walker (Twitter) India's proposed free trade agreement (FTA) with the UK has raised concerns among domestic whiskey producers, as it may result in a significant surge in the shipment of popular brands like Johnnie Walker Black Label and Chivas Regal, said a report by Times of India (TOI) on Monday.
The trade deal, which is nearing its finalisation, is expected to include a minimum import price (MIP) for bottled scotch, with reduced import duties for both bottled and cask whiskey.
Under the proposed FTA, bottled scotch above the MIP threshold could see import duties reduced from 150 per cent to 100 per cent, while casks may experience a halved duty at 75 per cent. Although the details are still being negotiated, discussions have revolved around gradually lowering customer duty on bottled Scotch to 50 per cent over a span of 10 years.
Based on the experience with Australia, which saw customs duty on wine slashed under an interim FTA, the domestic industry is pushing for an MIP of 5 per cent for every 750 ml bottle. However, there are suggestions that India may agree to an MIP of $4 per bottle, a move that could lead to a flood of Scotch imports from the UK. Domestic players fear this could potentially wipe out several homegrown brands and Indian-made foreign liquor (IMFL) products.
“It is going to cause a lot of damage as domestic players will find it tough to compete and foreign players, who have set up bottling units here, will not add fresh capacity and may go to the extent of reducing capacity, which will hit employment,” a source told TOI.
Imported products currently constitute a small portion, around 3.3 per cent, of the overall Indian whisky market. However, in the middle and premium segments, defined as whiskies priced over Rs 750 per bottle, the share of Scotch is nearly 32 per cent and steadily increasing.
Data from IWSR, an international agency tracking the alcohol market, reveals a five-percentage-point increase in Scotch's market share over the past four years.
Domestic players, however, have expressed concerns to the government, pointing out that even without a reduction in import duty, there has been a surge in bottled Scotch imports in recent years.
For example, during 2022-23, bottled whisky imports more than doubled to $316 million from $152 million. Meanwhile, the value of bulk whiskey shipments increased by over 40 per cent to approximately $149 million during the same period.
It has been observed that all Scotch imports are originating from the UK, although some shipments are listed as coming from Singapore and the UAE, as they serve as global trans-shipment hubs.
“All the scotch is coming from the UK, although in several cases, the origin is shown as Singapore and the UAE, given that they are global trans-shipment hubs,” said an industry source.
The situation has been further compounded by states such as Maharashtra slashing excise duty to 150 per cent from 300 per cent in November 2021 for imported whiskies, while keeping the levy on domestic produce at 300 per cent. This has further fuelled the influx of Scotch imports into the Indian market.
Copyright©2025 Living Media India Limited. For reprint rights: Syndications Today
