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First Post
5 days ago
- Business
- First Post
India-UK FTA: Wait for cheap Scotch whisky may not end the way you think
While the free trade agreement between India and the UK deals with a reduction in the duty on UK-made whisky and gin, the wait for cheap Scotch whisky may not end the way you think. read more While the India-UK Free Trade Agreement intends to halve tariffs on UK-made whisky and gin, the drop will not lead to major price revisions, at least in the short term, experts said. After the signing of the deal, the tariff would eventually drop to 40 per cent in over ten years. Industry executives say price revision may not be significant initially. It is pertinent to note that the agreement still awaits ratification by the parliament of the United Kingdom before the changes to the deal come into effect. Even when they come down, the reduction in prices will be in the range of only 8 to 10 per cent as the share of customs duty to the cumulative retail price of scotch is only around 15-20 per cent, industry officials told The Times of India. STORY CONTINUES BELOW THIS AD The reduction in the duty on Scotch had been a major ask for the British government while both nations were negotiating the Comprehensive Economic and Trade Agreement. Meanwhile, the UK parliament is likely to ratify the deal only by the middle of next year. More from World India-UK trade deal: How traditional Indian brews like Feni and toddy will soon hit UK store shelves There will still be hurdles once the agreement is ratified by the parliament. Once the deal is approved, the customs duty will come down to 75 per cent, and thereafter reduced to 40 per cent over the next decade. Industry experts remain optimistic Top international spirit makers such as Diageo welcomed the move, and even Indian makers who source Scottish spirits for blending in their local brands. 'We laud the Indian and British governments for formalising this historic treaty, which will boost bilateral trade and positively impact the accessibility of premium Scotch whisky in India, reigniting growth and increased choice for Indian consumers,' Praveen Someshwar, MD & CEO of Diageo India, told TOI. However, industry officials say that despite the halving of the import duty, the actual reduction of consumer prices will not be more than 10 per cent. 'The share of customs duty to the overall structure of MRP is hardly 15-20 per cent, depending on the category. The rest comprises state government taxes and distribution margins. So actual consumer prices will come down by only 8-10 per cent,' an official said. With state taxes, production, distribution and marketing costs remaining unchanged, tariff reduction will translate into less than 10 per cent of their cost savings, which may not be passed entirely.
Time of India
7 days ago
- Business
- Time of India
Deal sealed, but Scotch to stay pricey till 2035
This is a representative AI image NEW DELHI: The much-anticipated duty cuts for Scotch and gin is not happening overnight. While import duty will come down from 150% to 75%, it is unlikely to happen until at least the second half of 2035. That's because the agreement will take at least a year to be ratified by the British Parliament and there is a gradual tariff reduction roadmap starting with duties in India dropping to 110% in the first year of implementation. The UK government said customs duty will reduce to 40% over the next decade. What's more, govt has got the UK to agree to a minimum import price which means, whisky, gin or any other drink that costs under $5 in a one litre bottle or $6 in a 750 ml bottle will get the tariff benefit and the MIP will be indexed to inflation. However, industry officials say that despite halving import duty, the actual reduction of consumer prices will not be more than 10%. "The share of customs duty to the overall structure of MRP is hardly 15-20%, depending on the category. The rest comprises state govrnment taxes, and distribution margins. So actual consumer prices will come down by only 8-10%," an official said. The reduction in import duty will be a benefit for manufacturers of Indian Made Foreign Liquor. Around 80% of imported scotch is in bulk form, which is used for bottling in India and for blending by local whisky brands. But the industry cheered the move. Sanjit Padhi, CEO of International Spirits and Wines Association of India (ISWAI), said the agreement paves the way for a more balanced and equitable trade environment, particularly as Indian alcohol exports to the UK have zero import duties. "We laud the Indian and British governments for formalising this historic treaty which will boost bilateral trade and positively impact the accessibility of premium Scotch whisky in India, reigniting growth and increased choice for Indian consumers," Praveen Someshwar, MD and CEO of Diageo India, said. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
24-07-2025
- Business
- Time of India
India-UK FTA: International premium spirits to be more accessible but benefits may be limited, say experts
The India-UK free trade agreement will reduce duties on imported spirits, making premium international options more accessible to Indian consumers, according to industry players, but experts cautioned that the benefits may be limited as the maximum price reduction could be only up to Rs 300 per bottle. As per the FTA signed in London between the two governments, India is reducing duty on UK whisky and gin from 150 per cent to 75 per cent and further to 40 per cent in the tenth year of the deal. Explore courses from Top Institutes in Please select course: Select a Course Category Public Policy Data Science Technology Digital Marketing Data Analytics CXO Project Management PGDM healthcare Design Thinking Data Science Finance Others Cybersecurity Product Management Leadership MBA Management Healthcare Artificial Intelligence others MCA Skills you'll gain: Economics for Public Policy Making Quantitative Techniques Public & Project Finance Law, Health & Urban Development Policy Duration: 12 Months IIM Kozhikode Professional Certificate Programme in Public Policy Management Starts on Mar 3, 2024 Get Details Skills you'll gain: Duration: 12 Months IIM Calcutta Executive Programme in Public Policy and Management Starts on undefined Get Details "Whisky producers will benefit from tariffs slashed in half, reduced immediately from 150 per cent to 75 per cent and then dropped even further to 40 per cent over the next ten years - giving the UK an advantage over international competitors in reaching the Indian market," as per an official statement of the UK government. Reacting to the development, the International Spirits and Wines Association of India (ISWAI), which represents premium alcoholic beverage companies in India (mostly MNCs), hailed it as a historic moment for the alcobev sector and paves the way for a more balanced and equitable trade environment. "The deal will significantly benefit Indian consumers, as premium international spirits will become more accessible, thereby accelerating the ongoing trend of premiumisation. It will also stimulate growth across ancillary sectors, such as hospitality, tourism, and retail, while potentially increasing the revenue for Indian states," ISWAI CEO Sanjit Padhi said. Live Events Diageo India MD and CEO Praveen Someshwar said: "We laud the Indian and British governments for formalising this historic treaty, which will boost bilateral trade and positively impact the accessibility of premium Scotch whisky in India, reigniting growth and increased choice for Indian consumers". Chivas Brothers Chairman and CEO Jean-Etienne Gourgues termed the India-UK FTA as "a sign of hope in challenging times for the spirits industry". "India is the world's biggest whisky market by volume, and greater access will be an eventual game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine's," Gourgues noted. Industry experts, however, opined that while companies could benefit end-consumers, there would be very few benefits in terms of price reduction. "Consumer prices for imported Scotch (whiskey) are not likely to change much. Most of the taxes on alcohol sit in states, and even if all customs duty reduction is passed on, the impact on consumer prices of imported Scotch whiskies will be in the range of Rs 100-300 per bottle," liquor industry expert Vinod Giri said. Since price segments in whisky are currently too wide, this much reduction is not going to win any new consumers, and hence companies are likely to instead pocket the savings, he added. Moreover, with the FTA in place, there is a likelihood that over the next few years, the bottled-in-India (BII) Scotch whiskies category, where Scotch is imported in bulk for bottling here using local packaging material, would be replaced by direct imports. Brands, including Black Dog, 100 Pipers, Passport, Vat 69 and Black & White, are imported in India and then bottled here to save tax. "With falling customs duty, the entire rationale of packaging locally to save duty goes away, and it would make more commercial sense for companies to produce in Scotland at lower cost and export to India rather than go through the hassle of setting up and running a bottling plant in India. Consumers may see a marginal drop in prices but not enough to affect most Indian whiskies," he said. Confederation of Indian Alcoholic Beverage Companies (CIABC), an industry body of IMFL manufacturers, said the lowering of import duty on Scotch will help the domestic industry, as it will help to reduce the cost of blended products, but expressed concern that over possible 'dumping of Scotch whiskey brands', which have been bottled in India before the FTA. "We hope that the government will ensure that Scotch whisky and other spirits (BIO - bottled in origin) are not dumped at low import prices or routed through any other country at cheaper rates, which would hurt the YOY growth of premium and luxury Indian brands," CIABC Director General Anant S Iyer said. He also suggested "imposition of a minimum import price (MIP) on BIO products" by the government to safeguard the domestic industry.
Time of India
24-07-2025
- Business
- Time of India
India-UK trade deal sealed, but scotch prices to come down only by next year
NEW DELHI : Scotch prices — including brands like Glenlivet, Black Label, Glenmorangie, and Chivas Regal — won't drop just yet, despite the India-UK trade deal halving the steep 150% import duty. The agreement still awaits ratification by the UK Parliament before the changes come into effect. Even when they come down, the reduction in prices will be in the range of only 8-10% as the share of customs duty to cumulative retail price of scotch is only around 15-20%, industry officials told TOI. The reduction in duty on scotch had been a major ask of the UK govt during the negotiations for the Comprehensive Economic and Trade Agreement. The UK Parliament is likely to ratify the deal only by the middle of next year. Once approved, the customs duty will come down to 75%, and thereafter reduce to 40% over the next decade. Top international spirits makers such as Diageo welcomed the move, and even Indian makers – who source Scottish spirits for blending in their local brands – are upbeat. 'We laud the Indian and British govts for formalising this historic treaty which will boost bilateral trade and positively impact the accessibility of premium Scotch whisky in India, reigniting growth and increased choice for Indian consumers,' Praveen Someshwar, MD & CEO of Diageo India said. Sanjit Padhi, CEO ofInternational Spirits and Wines Association of India (ISWAI) said the agreement paves the way for a more balanced and equitable trade environment, particularly as Indian alcohol exports to the UK have zero import duties. However, industry officials say that despite halving of import duty, the actual reduction of consumer prices will not be more than 10%. 'The share of customs duty to the overall structure of MRP is hardly 15-20%, depending on the category. The rest comprises state govt taxes, and distribution margins. So actual consumer prices will come down by only 8-10%,' an official said. The reduction in import tariffs will also be a benefit for manufacturers of Indian Made Foreign Liquor (IMFL). Around 80% of the imported scotch is in bulk form, which is used for bottling in India and for blending by local whisky brands. Abhishek Khaitan, MD of Radico Khaitan, said the company sees significant 'strategic and cost advantages' due to the trade deal. 'We have estimated our scotch requirements valued at over Rs 250 crore in FY26, and this treaty represents a substantial opportunity for value creation… this agreement is a win-win; empowering Indian enterprises to elevate their global competitiveness while showcasing India's excellence and innovation on the world stage. ' Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
24-07-2025
- Business
- Business Standard
India-UK FTA to cut spirit duties, but price drop may be limited: Experts
The India-UK free trade agreement will reduce duties on imported spirits, making premium international options more accessible to Indian consumers, according to industry players, but experts cautioned that the benefits may be limited as the maximum price reduction could be only up to ₹300 per bottle. As per the FTA signed in London between the two governments, India is reducing duty on UK whisky and gin from 150 per cent to 75 per cent and further to 40 per cent in the tenth year of the deal. "Whisky producers will benefit from tariffs slashed in half, reduced immediately from 150 per cent to 75 per cent and then dropped even further to 40 per cent over the next ten years - giving the UK an advantage over international competitors in reaching the Indian market," as per an official statement of the UK government. Reacting to the development, the International Spirits and Wines Association of India (ISWAI), which represents premium alcoholic beverage companies in India (mostly MNCs), hailed it as a historic moment for the alcobev sector and paves the way for a more balanced and equitable trade environment. "The deal will significantly benefit Indian consumers, as premium international spirits will become more accessible, thereby accelerating the ongoing trend of premiumisation. It will also stimulate growth across ancillary sectors, such as hospitality, tourism, and retail, while potentially increasing the revenue for Indian states," ISWAI CEO Sanjit Padhi said. Diageo India MD and CEO Praveen Someshwar said: "We laud the Indian and British governments for formalising this historic treaty, which will boost bilateral trade and positively impact the accessibility of premium Scotch whisky in India, reigniting growth and increased choice for Indian consumers". Chivas Brothers Chairman and CEO Jean-Etienne Gourgues termed the India-UK FTA as "a sign of hope in challenging times for the spirits industry". "India is the world's biggest whisky market by volume, and greater access will be an eventual game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine's," Gourgues noted. Industry experts, however, opined that while companies could benefit end-consumers, there would be very few benefits in terms of price reduction. "Consumer prices for imported Scotch (whiskey) are not likely to change much. Most of the taxes on alcohol sit in states, and even if all customs duty reduction is passed on, the impact on consumer prices of imported Scotch whiskies will be in the range of ₹100-300 per bottle," liquor industry expert Vinod Giri said. Since price segments in whisky are currently too wide, this much reduction is not going to win any new consumers, and hence companies are likely to instead pocket the savings, he added. Moreover, with the FTA in place, there is a likelihood that over the next few years, the bottled-in-India (BII) Scotch whiskies category, where Scotch is imported in bulk for bottling here using local packaging material, would be replaced by direct imports. Brands, including Black Dog, 100 Pipers, Passport, Vat 69 and Black & White, are imported in India and then bottled here to save tax. "With falling customs duty, the entire rationale of packaging locally to save duty goes away, and it would make more commercial sense for companies to produce in Scotland at lower cost and export to India rather than go through the hassle of setting up and running a bottling plant in India. Consumers may see a marginal drop in prices but not enough to affect most Indian whiskies," he said. Confederation of Indian Alcoholic Beverage Companies (CIABC), an industry body of IMFL manufacturers, said the lowering of import duty on Scotch will help the domestic industry, as it will help to reduce the cost of blended products, but expressed concern that over possible 'dumping of Scotch whiskey brands', which have been bottled in India before the FTA. "We hope that the government will ensure that Scotch whisky and other spirits (BIO - bottled in origin) are not dumped at low import prices or routed through any other country at cheaper rates, which would hurt the YOY growth of premium and luxury Indian brands," CIABC Director General Anant S Iyer said. He also suggested "imposition of a minimum import price (MIP) on BIO products" by the government to safeguard the domestic industry.
