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India–UK FTA to boost alcoholic beverages sector
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Friday, 17 July, 2026, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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The India–UK Free Trade Agreement marks a significant milestone in strengthening bilateral trade and creating a more balanced framework for the alcoholic beverages sector. Under the agreement, Total Customs Duties on UK Whisky and Gin will reduce from 150% to 75% upon entry into force and gradually decline to 40% over the next decade. Once implemented, the agreement is expected to drive investment, premiumisation, consumer choice and long-term revenue growth, while supporting India's ambition to become a globally competitive market.
Sanjit Padhi, CEO, ISWAI, said, " The India–UK Free Trade Agreement is a strategic opportunity—not merely a tariff milestone—and policy decisions must stay focused on the broader economic dividends for all stakeholders, especially consumers. This agreement delivers three distinct benefits: Greater consumer choice, unlocking access to a wider range of premium global brands, improved access to bulk scotch for domestic producers and modest price relief for consumers. Together, these outcomes reinforce a consumer-first, quality-led vision for India's growing alcobev sector. The full benefits of the India–UK FTA will be realised only if tariff rationalisation is passed onto the consumer and is not offset by through additional State taxation or restrictive regulatory measures."
On taxation, Padhi said, "It is important that discussions around taxation are guided by complete facts and objective analysis rather than selective interpretation of data. When the entire tax structure including customs duties, State excise, VAT and other applicable levies is taken into account, the effective tax burden on imported spirits remains broadly comparable to similarly priced premium domestic products.”
It is also important to note that nearly 79% of India's Scotch whisky imports comprise bulk Scotch, which is used for blending in Indian Made Foreign Liquor (IMFL). The tariff reduction is not merely on imported bottled spirits; domestic suppliers can also now access high-quality bulk Scotch more competitively priced, supporting the production of premium Indian whiskies.
Padhi said, "The India–UK FTA creates a unique opportunity for Indian manufacturers to improve product quality, rationalise input costs, and enhance their competitiveness in both domestic and export markets. It is therefore surprising that sections of the domestic industry continue to present an incomplete picture, despite the fact that Indian IMFL manufacturers stand to be among its biggest beneficiaries."
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