India-US BTA: How tariff cut on imported spirits, wines will not rattle 'Desi' brands

Under the interim bilateral trade framework announced by India and the United States, India has agreed in principle to “eliminate or reduce” tariffs on American wine and spirits, according to a joint statement released by the White House.

The move has sparked questions about cheaper imports and sharper competition for domestic distillers, but early industry responses suggest the immediate retail impact may be limited rather than disruptive.

Why domestic brands think, 'tariff cuts' may not translate into big retail cuts?

The first reality check is structural: even if customs duties move, India’s alcobev pricing is still shaped by layers that don’t automatically soften, state excise regimes, local levies, distributor structures, and crucially, a floor that prevents deep discounting.

A note by PIB on the agreement underlined that “Alcoholic beverages have been offered under tariff reduction along with minimum import price-based formulations”, a design meant to keep imports from crashing prices at the bottom end.

That aligns with how the Indian Malt Whisky Association (IMWA) is reading the moment: “Even with tariff reductions under the proposed India–US trade framework, the downward retail correction will be modest," said Maj Gen (dr) Rajesh Chopra AVSM (retd) Director General of IMWA.

“Even if nominal duties come down, distributor and excise add-ons mean the consumer might see reductions in the range of 7-8% at best, not deep cuts,” Chopra told Business Today. 

From the producer side, implementation uncertainty is also key

Natwar Aggarwal, Chief Financial Officer, Piccadily Agro Industries Ltd., said: “Price correction is difficult to gauge at this time, as it remains to be seen how tariff changes will be interpreted and implemented.” He flagged the core constraint: “In India’s alcobev industry, pricing is governed at the state level, with each state operating under its own excise framework and taxation structure.”

In short: tariff rationalisation can change the headline math, but the street price still runs through India’s complex, state-driven bottlenecks.

The US share problem: it’s tiny, and taste isn’t neutral

The second reality check is market structure. By volume, the Indian whisky market is overwhelmingly domestic, and the American slice is still niche.

According to a Times of India report, American whiskey represents only a very small fraction of India’s whisky market. With annual sales of roughly 229,000 nine-litre cases, it accounts for well under 0.1% of total whisky volumes in the country.

Where the pressure could actually show up: niches, not mass-market

That doesn’t mean Indian premium players get a free pass. The Indian Malt Whisky Association itself left room for selective pressure, especially in niche imported segments where duty cuts hit first, and where certain labels substitute for domestic super-premium offerings.

But even here, the industry’s preferred response is not discounting, it’s differentiation.

The association’s advice is explicit: “Indian brands should remain agile, but not in a reactive discounting mode.” And: “Deep discounting isn’t the most sustainable response; instead, highlighting authenticity, climate-driven maturation, and local craftsmanship will help Indian premium brands retain price integrity and consumer loyalty even as choice expands,” Chopra added. 

The bigger shift: premiumisation accelerates, and “Made in India” gets export leverage

Where the BTA could matter more is not in undercutting Indian brands, but in raising the premium bar and expanding the global lane for Indian labels.

The Indian Malt Whisky Association sees premiumisation continuing, just not as a US-only story:

“Reduced tariffs and wider global portfolio access (from the EU, UK, and potentially US) will enrich consumer choice and spur demand for higher-quality expressions overall,” according to Chopra. It frames that as a catalyst that can benefit domestic premium categories too.

That’s also the spine of International Spirits and Wines Association of India CEO Sanjit Padhi’s view, watching both the domestic opportunity and the outward-facing one:

“The recently announced India–US trade deal is an encouraging development. While the announcement signals an intent to rationalise tariffs, we await greater clarity on sector-specific provisions and their implications, particularly for alcoholic spirits.

"Improved market access and enhanced trade create new standards, with evolving categories like Indian single malts that are now competing successfully with global benchmarks. This will further enable Indian brands and Bottled-in-India products to access international markets, strengthen global partnerships, and truly advance the vision of ‘Make in India’ on the world stage,” Padhi said. 

P S GILL, CEO, Consumer Division, Globus Spirits Ltd, added, "Absolutely, tariff liberalisation acts as an accelerant rather than a driver. Imports will broaden the palate and validate premium pricing benchmarks, but the underlying catalyst remains domestic consumer evolution, particularly among metro and aspirational drinkers who are trading up."

Indian brands bet on standards and quality

For Indian spirits, this is the pivot: imports may broaden the top-end menu, but Indian premium players increasingly believe they can compete on brand and liquid, without tariff shelter.

Chopra said: “Indian premium and super-premium whiskies, particularly single malts, have transitioned from tariff-shielded products to globally competitive spirits with strong quality credentials and distinctive identities.”

Ankur Sachdeva, Co-founder and CEO, Uppal Brewers and Distillers (UBD) added, "Indian craft spirits and premium blends are winning global accolades on merit. Our industry has spent the last few years perfecting the substance inside the bottle. For UBD, this trade agreement is a welcome validation; it allows us to prove that India's 'liquid quality' stands tall on a level playing field. We are ready to compete on the global standards of luxury and craftsmanship.