How the India-UK FTA could reshape the global liquor trade

The India-UK Free Trade Agreement promises to be one of the most consequential policy shifts in the global alcoholic beverage sector in decades. Beyond tariff reductions, it carries wide-ranging implications for production costs, brand positioning, cross-border investment, and the balance of influence within the global spirits ecosystem.

India today stands as the largest whisky market in the world and the fastest-growing base of premium spirits consumers. The UK remains the historic powerhouse of Scotch whisky, gin, and high-end drinks. When these two markets open to each other through an FTA, the impact will be transformative.

Tariff Restructuring and Market Dynamics

India’s current import duty on Scotch and other UK spirits is among the steepest globally, at 150%. Under the proposed agreement, duties could fall to 75% initially and later to 30-40% over the next decade. This change would completely alter the economics of imported spirits.

For UK exporters, India would immediately become a far more competitive destination. A market where imported Scotch currently reaches barely 2% of consumers could expand dramatically as prices ease and accessibility improves. Producers may also consider exporting in bulk for bottling and blending within India, cutting costs and improving scalability.

For Indian distillers, the benefits are equally compelling. Lower import duties would reduce input costs for premium Indian-made foreign liquor brands that already use imported Scotch malt. The resulting price advantage could translate into higher margins or allow producers to improve quality and packaging to meet rising consumer expectations.

The Untapped Export Window for India

Much of the public discussion has focused on cheaper Scotch entering India, but the reverse flow could prove just as transformative. The FTA opens the British market to Indian spirits at near-zero duty, effectively removing one of the biggest barriers to entry.

This move allows Indian producers to reach a mature, premium-driven market supported by a strong diaspora base and consumers increasingly curious about distinctive global offerings. Indian gins from Goa, Maharashtra, and Karnataka are already finding fans abroad. Single malts from India have earned international acclaim, while regional spirits such as feni, mahua, and rice-based liquors are beginning to capture niche audiences seeking authenticity and provenance.

The UK could become the springboard for Indian labels to reach the EU and North America, bringing unprecedented global visibility and legitimacy to homegrown distilleries.

Investment and Infrastructure Transformation

The agreement will also trigger large-scale investments on both sides. British distillers are likely to partner with Indian companies for bottling, blending, warehousing, and logistics, strengthening the supply chain for premium imports. This could also push the creation of temperature-controlled warehouses, modern maturation facilities, and technology-driven distribution systems across India.

Sustainability will naturally come into sharper focus. Energy-efficient distillation, water conservation, and eco-friendly packaging are likely to become standard as global brands seek to align with responsible production norms.

At the same time, Indian firms may look westward; investing in UK-based distributors, warehouses, or even boutique distilleries to secure market presence and access to the broader European trade network.

Changing Consumer Behaviour

In India, falling import prices will create a strong “new middle premium” segment. Consumers who once favoured semi-premium domestic whiskies may now trade up to entry-level Scotch, fuelling rapid growth in the ₹2,000-₹4,000 range. This shift will elevate expectations around quality, transparency, and presentation, pushing local brands to refine their offerings.

In the UK, Indian labels will begin to redefine familiar categories. Indian single malts will compete directly with moderately priced Scotch, while spiced and dark rums from India could find eager audiences among consumers seeking warmth and complexity. Indian gins, infused with regional botanicals, promise distinctive flavour profiles that complement the UK’s long-standing gin culture.

Redefining Global Value Creation

For decades, the global liquor trade has been dominated by Europe and the United States. The India–UK FTA could alter that equation by giving Indian producers a pathway to move from high-volume exports to high-value positioning. With stronger brand visibility and recognition abroad, Indian distillers can command better price points and contribute meaningfully to the country’s premium export basket.

For the UK, the agreement ensures sustained growth for Scotch, which may find its largest global market in India. British producers will gain a secure base for blending and packaging targeted at the broader Asian market, using India as an operational hub.

Together, these two markets could influence how the world consumes, prices, and perceives spirits over the coming decades.

Challenges and Policy Coherence

The potential is enormous, but execution will demand coordination and reform. India must address state-level excise variations, inconsistent registration norms, and labelling hurdles. Infrastructure gaps, especially in logistics and cold-chain storage, need urgent attention. The UK’s stringent product compliance and health-related standards may require adaptation from Indian producers. Currency volatility could also affect pricing stability.

For both nations, success depends on smooth implementation and regulatory alignment that supports trade rather than hinders it.

A Defining Chapter Ahead

The India–UK Free Trade Agreement carries the power to reset how the world’s liquor industry operates. It can rewire supply chains, expand consumer bases, and attract fresh capital into both economies. It also offers Indian spirits a long-awaited chance to find their rightful place on global shelves while reinforcing Scotch’s reach within its most promising growth market.

If executed with foresight and fairness, this agreement could mark the beginning of a new chapter for global liquor trade; one authored jointly by India and the United Kingdom.

(Views are personal; the author is Regional Director – Indian Sub-continent, Angus Dundee Distillers)