UK-India FTA spells opportunity for Scotch whisky
The new free trade agreement (FTA) between the UK and India comes into force today (15 July) and Scotch whisky producers are keen to capitalise.
UK prime minister Keir Starmer and Indian prime minister Narendra Modi signed the long-anticipated FTA in July 2025 following three years of negotiations.
Now in effect, the agreement has cut tariffs on exports of Scotch whisky to India from 150% to 75%. This rate will continue to fall, settling at 40% after the first 10 years.
Figures released by the UK government in June of this year indicated the landmark deal could boost GDP by £4.8 billion (US$6.427bn) across all export categories and increase bilateral trade by £25.5 billion (US$34.148bn) every year.
Douglas Alexander, secretary of state for Scotland, said: “India is an important and growing market for Scotland and the FTA will see those economic and cultural relationships continue to flourish.
“In particular, as the world’s biggest Scotch whisky market by volume, this agreement represents an opportunity to grow thanks to the significant cut in tariffs.”
Scotch whisky exports to India were valued at £286m (US$383.017m) in 2025, while volume exports for the same period were equivalent to 220m 700ml bottles. Under the new FTA, these figures are expected to rise significantly.
Mark Kent, chief executive of the Scotch Whisky Association (SWA), commented: “With the entry into force of the UK-India FTA, Scotch Whisky producers are raising a dram to many years of negotiations to secure this landmark deal, which will support the growth of our industry in India, the largest whisky market in the world.
“A boost to exports, jobs and investment in both the UK and India are among the key long-term benefits of the FTA, which is a positive development for the sector amid a challenging few years that has seen Scotch whisky face international volatility and rising costs and regulation here at home.”
Single malt producers in Scotland and India welcome tariff reduction
SWA figures released earlier this year valued total Scotch whisky exports at £5.3 billion (US$7.1bn), representing a drop of 1.8% in value and 4.3% in volume since 2024.
This shortfall was attributed in part to a 10% tariff imposed by the Trump administration in the US in April 2025, which resulted in Scotch whisky exports to the States falling by 4% in value and 9.2% in volume.
With the crucial US market still unpredictable, many companies producing whisky in the UK could look to India for growth.
Nodjame Fouad, CEO of the aged spirits and Champagne division at Pernod Ricard, said: “The opening up of the Indian market represents a significant opportunity for the UK as the world’s leading exporter of spirits, and a welcome boost for the Scotch whisky industry.”
Pernod Ricard’s portfolio includes Scottish single malts The Glenlivet and Aberlour, as well as blended Scotch whiskies Chivas Brothers, Ballantine’s and 100 Pipers.
The company also markets blends of Scotch whisky with Indian spirits, including Blender’s Pride and the best-selling Royal Stag, which falls under the category of Indian made foreign liquor (IMFL).
As the vast majority of whisky exports to India are bulk, local producers have voiced concerns about the impact an influx of lower-priced Scotch whiskies could have on the lucrative domestic market for IMFL.
Indian single malt brands, by contrast, have expressed optimism about the FTA.
Paul John, founder of Goa-based Paul John Indian Whisky, said: “Once more brands come into the market, there will be more awareness created for single malts. With India being such a huge whisky market, you’re going to see a lot of people upgrading to single malts.”
The Indian Malt Whisky Association recently launched a new set of standards for domestically produced single malt whisky with an accompanying mark of authenticity.
The New Delhi-based trade body described the initiative as ‘a formal, industry-led framework to define and certify genuine Indian single malts amid growing global recognition and increasing domestic demand’.
In January 2026, the UK also signed a deal with China to cut tariffs on Scotch whisky from 10% to 5%.
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