Scotch whisky industry poised for significant growth due to new UK-India trade agreement
In a groundbreaking move, the UK-India trade deal has been hailed as a game changer as it set the stage for Scotch Whisky to penetrate the world's largest whiskey market. This monumental agreement is expected to propel Scotch Whisky exports and create substantial job opportunities across the UK.
According to the terms of the deal, the UK's previous 150% tariff on Scotch Whisky will be cut in half to 75%, with potential further reductions in the coming years [2][3][5]. This significant tariff reduction addresses a long-standing barrier to market access in India.
Mark Kent, Chief of the Scotch Whisky Association (SWA), described it as a "once in a generation" deal and a "landmark moment for Scotch Whisky." Kent predicted the deal could increase Scotch Whisky exports to India by £1bn over the next five years and create 1,200 jobs across the UK [4][5].
India is the world's largest whisky-consuming market, with Scotch Whisky currently holding a 2% share of the total market in 2024 [1]. However, this figure is expected to rise as the lower tariffs trickle down to lower prices. Analysts believe that India's growing middle class will drive demand for premium imported whiskies like Scotch in the medium term [1].
Diageo's CEO, Debra Crew, lauded the trade deal as a "huge achievement." She emphasized that the deal would increase quality and choice for discerning customers across India [4]. Despite a 7% fall in reported net Scotch sales and a 13% decline in Johnnie Walker net sales in Diageo's latest half-year results, Crew remained optimistic about the deal [2].
The deal, which also includes a social security pact for Indian workers and reduced tariffs on some alcohols and cars, has been acclaimed as a major victory for Prime Minister Keir Starmer. According to Marley Morris, associate director for trade at IPPR, the deal will boost growth, create jobs, and demonstrate the UK's ability to turn uncertainty into opportunity [5].
However, pro-EU groups argue that the agreement's economic impact is relatively small compared to potential benefits from a UK-EU customs union. Supporters of the deal emphasis the strategic long-term benefits and the alignment with post-Brexit trade goals [5].
Small and medium Scotch Whisky producers are expected to benefit from this deal as they will now gain the opportunity to enter the Indian market and offer India's highly educated whisky connoisseurs greater choice [4]. The deal is set to be transformative for the Scotch Whisky industry, the UK, and India.
In 2024, the lowered tariffs resulting from the UK-India trade deal are anticipated to boost Scotch Whisky exports, potentially increasing by £1bn over the next five years, as predicted by Mark Kent, Chief of the Scotch Whisky Association (SWA) [4][5]. Encouraged by this deal, technology-driven exports of Scotch Whisky, including premium varieties, could make significant inroads into India's whisky market, given the increasing demand from the country's growing middle class [1]. As a result, numerous job opportunities in the production, technology, and export sectors across the UK may arise due to the expected growth in Scotch Whisky dealings with India.
