Latest news with #India–UKFreeTradeAgreement
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Business Standard
21-05-2025
- Business
- Business Standard
Diageo to cut Scotch prices in India as UK FTA halves import duties
Global spirits major Diageo Plc is set to reduce the prices of its Scotch whisky brands in India following the recently signed India–UK Free Trade Agreement (FTA), which slashes import duties on UK-made spirits, The Economic Times reported. Under the FTA, customs duties on whisky and gin made in the UK will fall from 150% to 75% initially, and gradually drop to 40% over a 10-year period. For Diageo, which follows a July–June financial year, the price cut will likely begin with high single-digit percentage reductions, with the company confirming that it will fully pass on the duty benefits to consumers. Prices may drop to ₹3,500 per bottle India is Diageo's largest market by volume and second-largest by value. Currently, Scotch whisky accounts for just 4 per cent of total whisky consumption in India due to its high price point. With the duty cut, Diageo expects greater access and demand. A bottle that currently retails for ₹5,000 could fall to ₹3,500–₹4,000, depending on state taxes and distributor margins. The company owns global brands including Johnnie Walker, Tanqueray, and Smirnoff. Boutique brands may benefit, but state taxes still a barrier The lower duties may also pave the way for smaller, boutique Scotch labels to enter the Indian market—previously priced out by high import duties. However, state taxes, registration costs, and licensing requirements could slow the price cuts from reaching end consumers. Liquor companies in India face: Separate label registrations in each state Annual licence fees Distributor margin variations Resistance from states concerned about tax revenue loss Some companies are already invoicing products at less-than-optimal margins, and there are concerns about minimum import pricing and predatory pricing from new entrants. India imported 192 million bottles of Scotch in 2024 Despite regulatory hurdles, the India–UK FTA is being seen as a breakthrough for global spirits makers. India became the top global market for Scotch whisky by volume in 2024, importing 192 million bottles, up from 167 million in 2023 — surpassing France. While the market for imported single malts has seen a slight dip — partly due to growing consumer interest in Indian malts — the long-term outlook remains robust, especially for mid-tier imported labels that could benefit from the new pricing environment.
The Hindu
07-05-2025
- Business
- The Hindu
A.P. Chambers welcomes India–UK Free Trade Agreement
AP Chambers of Commerce and Industry Federation president P. Bhaskara Rao and general secretary B. Raja Sekhar welcomed the conclusion of the India–UK Free Trade Agreement (FTA), calling it a historic step towards boosting exports, generating employment and accelerating India's economic growth. In a press release, they said the FTA offers zero-duty access to 99% Indian exports and opens up major opportunities for sectors crucial to Andhra Pradesh, including textiles, pharma, leather, marine products, engineering goods and food processing. Most of those sectors were struggling for the past couple of years due to global recession and the Russia-Ukraine war. The India-UK trade pact would significantly enhance economic activity and global competitiveness of the Indian MSMEs and exporters. The strong commitments in IT, professional and educational services secured by India would make Indian service providers more competitive and open up plenty of opportunities to professionals and youth in A.P., Mr. Rao noted, adding that the pact was in alignment with the Viksit Bharat 2047 vision.
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Business Standard
07-05-2025
- Business
- Business Standard
Scotch whiskey to get cheaper in India as import duty slashed under UK FTA
Scotch whisky fans in India may soon find their favourite drinks becoming cheaper. Under a new India–UK Free Trade Agreement (FTA), the current 150 per cent import duty on Scotch whisky will be cut to 75 per cent initially and then gradually reduced to 40 per cent over the next 10 years. The tariff cut is expected to benefit both consumers and the Scotch industry. A bottle of Scotch whisky that currently retails for around ₹5,000 may soon cost between ₹3,500 and ₹4,000 after the initial reduction, depending on state taxes and distributor margins. As the tariff continues to fall, prices are expected to dip further. 'Transformational' for UK exports Mark Kent, chief executive of the Scotch Whisky Association, described the agreement as a 'once in a generation deal'. 'The reduction of the current 150 per cent tariff on Scotch whisky will be transformational for the industry and has the potential to increase Scotch whisky exports to India by £1 billion over the next five years, creating 1,200 jobs across the UK,' he said in a statement. 'The reduction of the current 150% tariff on Scotch Whisky will be transformational for the industry. The deal has the potential to increase Scotch Whisky exports to India by £1bn over the next 5 years and create 1200 jobs across the UK," Kent added. India has already overtaken France to become the largest market for Scotch whisky exports by volume, with 192 million bottles exported in 2024, up from 167 million in 2023. The agreement also promises to open the Indian market to a broader range of Scotch brands, including boutique distilleries previously unable to compete due to high tariffs. This could bring more variety and competitive pricing to the premium segment of the market. Domestic market shielded by gradual rollout Despite the tariff cuts, Indian officials maintain that the domestic alcoholic beverage market — dominated by country-made liquor (88 per cent) and India-made foreign liquor (9.5 per cent) — will not face significant disruption. Scotch currently accounts for just 2.5 per cent of India's whisky market. 'The incremental increase in imports of Scotch whisky, therefore, would not significantly affect the domestic market. The tariff reduction on imports is over a longer period of time (10 years) and even after that it will attract significant customs duty (40 per cent),' news agency PTI quoted a government official as saying. Boost to FDI and local industry The official also noted that easing import duties could help attract foreign direct investment (FDI) into the Indian liquor industry. 'Liberalisation of duties would invite UK's expertise in terms of spirit/wine making, quality control, marketing and consumer awareness,' the official said. Moreover, improved FDI prospects and access to advanced technologies could benefit Indian producers of foreign liquor, while potentially increasing government revenue, curbing counterfeits, and enhancing export quality. Industry voices concern over future FTAs Anant S Iyer, Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), expressed concern that similar concessions in future FTAs with the EU, US, or Australia could harm the Indian alcobev and wine sectors. 'We fear that if the same template of duty reduction is followed for the trade deals with the EU, the US and other nations which produce spirits and wines, then the Indian Alcobev industry, including the wine sector, could get adversely impacted,' he said, reported PTI. Iyer also urged the government to review state-level excise concessions on imported liquor and stressed the need for better market access to boost India's alcoholic beverage exports to $1 billion by 2030.
India Today
07-05-2025
- Business
- India Today
Scotch whisky prices set to drop after India-UK trade deal. Details here
Scotch whisky lovers in India are about to get a pleasant surprise, as the Indian government has agreed to reduce the hefty import tariffs on the popular liquor. As part of the recently concluded India–UK Free Trade Agreement (FTA), the current 150% import duty on Scotch whisky will be slashed. Once the deal takes effect, the tariff will decrease to 75% and is expected to gradually fall to 40% over the next decade. The reduction is expected to bring premium and mid-range Scotch whiskies within reach of a larger section of Indian consumers. A bottle that typically costs Rs 5,000 could soon be priced between Rs 3,500 and Rs 4,000 following the initial tariff cut, and may drop even further as the tariff continues to decline, depending on local taxes and distributor margins. Mark Kent, the Chief Executive of the Scotch Whisky Association, described the FTA as a "once in a generation deal." He added, 'The reduction of the current 150% tariff on Scotch whisky will be transformational for the industry and has the potential to increase Scotch whisky exports to India by 1 billion over the next five years, creating 1,200 jobs across the UK." The tariff reduction doesn't just promise lower prices; it also opens up the Indian market to a wider variety of Scotch brands, especially smaller, boutique distilleries that may not have previously had the resources to penetrate the market. With this change, consumers can expect an influx of new options, better quality, and possibly more promotional offerings, as UK-based brands aim to compete with local Indian whiskies. Prime Ministers Narendra Modi of India and Keir Starmer of the UK jointly announced the FTA, which reflects a broader trade strategy aimed at doubling bilateral trade to $100 billion by 2030. UK officials estimate that reductions in Indian tariffs on British products—including whisky, cars, cosmetics, and medical devices—will save 400 million in the first year, with the figure expected to rise to 900 million over the next decade. British officials see the whisky tariff reduction as just one of many 'wins' for the UK in a deal they believe will deliver substantial economic benefits and job growth year after year.
Indian Express
06-05-2025
- Business
- Indian Express
Most comprehensive trade deal India has negotiated, to be the template for future engagements: Commerce Ministry
The India-UK trade deal is significant in being the most comprehensive free trade deal that India has entered into so far and could serve as the template for future engagements, including the multiple trade deals that are currently under negotiation. This includes the complex deal with the European Union and the fast-tracked deal under negotiation with the United States. The Ministry of Commerce and Industry said Tuesday that the UK trade deal will open up export opportunities for labour-intensive sectors such as textiles, marine products and leather, among others, as around 99 per cent of Indian exports will benefit from zero-duty access to the UK market. The India–UK Free Trade Agreement (FTA) ensures comprehensive market access for goods across all sectors, covering all of India's export interests, it said. India will gain from tariff elimination on approximately 99 per cent of tariff lines, covering almost 100 per cent of trade value—offering opportunities to increase bilateral trade between India and the UK, the ministry said. 'India has secured significant commitments on digitally delivered services for Indian service suppliers, especially in professional services such as architecture and engineering, computer-related services, and telecommunications services,' the trade ministry said. While both governments are yet to release the official text of the trade deal, the ministry said that the exemption for Indian workers temporarily in the UK—and their employers—from paying social security contributions for a period of three years under the Double Contribution Convention will result in significant financial gains for Indian service providers. The ministry said that the FTA eases mobility for professionals, including contractual service suppliers; business visitors; investors; intra-corporate transferees; partners and dependent children of intra-corporate transferees with the right to work; and independent professionals such as yoga instructors, musicians, and chefs. 'This agreement sets a new benchmark for equitable and ambitious trade between two large economies. It will benefit Indian farmers, fishermen, workers, MSMEs, start-ups, and innovators. It brings us closer to our goal of becoming a global economic powerhouse. This FTA is not only about goods and services, but also about people, possibilities, and prosperity. It protects our core interests while opening doors to India's greater participation in global value chains,' Commerce Minister Piyush Goyal said. Commerce Secretary Sunil Barthwal said the FTA is a game-changer and will further propel India on the path of rapid economic growth, while enhancing India's global integration. 'This is the most comprehensive free trade deal India has ever entered into and will be the gold standard for our future engagements,' he said.
