Scotch hopes India-UK trade deal will be boon for sector
The British and Indian governments have agreed to a trade deal touted to increase bilateral trade between the nations by £25.5bn. The deal saw a softening of Indian tariffs on imports of British gin and whisky which could spark growth for the UK's domestic spirits industry.
Indian levies on UK gin and whisky are to be slashed from 150% to 75%, with this figure set to fall to 40% by year 10 of the trade deal.
According to the Scotch Whisky Association (SWA), scotch makes up only a 3% share of the Indian whisky market. A reduction in tariffs could see scotch prices come down in the Indian domestic arena and sales see an uplift.
Mark Kent, chief executive of the SWA, believes the agreement could be a gamechanger for distillers.
He commented: “The UK-India free trade agreement is a once in a generation deal and a landmark moment for scotch whisky to the world’s largest whisky market.
“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.
“The deal is good for India too, boosting federal and state revenue by over £3bn annually, and giving discerning consumers in a highly educated whisky market far greater choice from SME scotch whisky producers who will now have the opportunity to enter the market.”
William Wemyss, MD of Wemyss Family Spirits, which counts Kingsbarns Distillery as one of its brands, added: “India has long been seen as the single most exciting growth market for scotch. It’s home to the largest population of whisky drinkers in the world, yet until now, punitive tariffs of 150% have held us back.
“For years, whisky producers like us have been locked out of meaningful access despite strong demand and growing appreciation for high-quality spirits…
“This deal could open the door to sustained investment, new partnerships, and long-term growth not just for our own business, but for distilleries across Scotland. It’s a positive and pragmatic step in the right direction, and one that we hope will be implemented swiftly and effectively.”
The deal will also see a reduction of Indian tariffs on British automotive production, from 100% to 10%, with UK-produced luxury cars expected to reap the benefits of the change.
Additionally, as part of the negotiations, the British government has introduced a national insurance contribution exemption for Indian employers relocating Indian workers to the UK. The ‘Double Contribution Convention’ will mean Indian companies will not need to pay the 15% levy for these employees, though the new arrivals would still be subject to the NHS surcharge for immigrant workers.
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