Indian Spirits cos stirred up to fight a premium battle as British scotch whiskies expected to flood India at reduced prices
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A slew of premium British scotch whiskies are expected to flood India at much reduced prices from the UK with import tariffs on whisky and gin set to be halved to 75% from 150% under the new India-UK FTA deal announced late Tuesday, industry executives said, further bolstering premiumisation.However, an executive of an Indian company said this will lead to increased competition for domestic liquor companies, which are turning to premiumisation. "We are concerned about the impact on local spirits companies, since the FTA may lead to cheaper scotch imports .'In 2024, India's imports of whisky, gin and other spirits stood at $439.04 million, according to the United Nations Comtrade database on international trade. 'The treaty will enable improved accessibility and choice of scotch for Indian consumers, the largest whisky market,' Praveen Someshwar, MD of spirits maker Diageo India , said.The UK-headquartered Diageo sells Johnnie Walker Scotch whisky, Tanqueray gin, Baileys cream liqueur and Smirnoff vodka. Executives said the FTA will make available affordable premium foreign brands and spark competition for domestic liquor companies, which are increasingly benefitting from premiumisation.'This signals a positive shift for India's alco-bev sector, particularly for companies that are premiumising,' said Abhishek Khaitan, managing director of Radico Khaitan . He said as the largest importer of scotch whisky for blending, Radico sees 'significant potential for cost advantages through the expected reduction in customs duties.'Khaitan said Radico plans to import scotch malt worth `250 crore in fiscal year 2025-26. The tariffs on spirits will be halved from 150% to 75% before being reduced to 40% in a decade."We anticipate that this will accelerate the ongoing trend of premiumisation within the alcobev sector, positively impacting the exchequer of Indian states. India will also have access to premium international brands at affordable prices,' said Sanjit Padhi, chief executive of Indian Spirits and Wines Association of India Paul P John, chairman of the homegrown John Distilleries said it is crucial to ensure that both nations maintain a level playing field, safeguarding the interests of domestic industries and promoting fair competition.
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