Import Duty Cut Raises Fair-Play Concerns

India’s decision to slash import duties on Scotch promises cheaper shelves and fuller choices for consumers. But the move also raises a concern among the domestic spirit makers that this could unfairly tip the scales toward foreign brands. As such, the Confederation of Indian Alcoholic Beverage Companies (CIABC) is pushing for these non-tariff barriers to be addressed in ongoing trade dialogues so that Indian products have genuine access, not just theoretical entry. The principle is simple: support freer trade, but it has to be fair trade. The advocacy calls for measures that let Indian companies compete on a level playing field, says ANANT S Iyer, Director General, CIABC.

Achanging landscape in any industry can bring both downsides and upsides, and that’s certainly going to prove true for the alcoholic beverage sector. With India reducing the import duty on Scotch whisky from 150 percent to 75 percent, and with a further reduction to 40 percent planned over the next decade, the crucial issue is whether Indian spirits and wines, which employ millions, support farmers and generate significant state revenues, can grow on fair terms in this new landscape.

“That balance will decide whether the duty cut becomes a shared win for consumers, producers and governments alike, or whether it tilts disproportionately in favour of imports,” says Anant.

He opines that the relief measures at the state level have not yet been recalibrated. The result is that imported brands benefit twice, from lower import duties and legacy concessions that were meant for an earlier era. “For Scotch, this shift is immediate. Lower tariffs mean a cheap influx of Scotch brands and variants, many of which were previously priced out of the Indian market,” says Anant.

Shelves will start to look fuller, with mid-tier and entry-level imports pressing hard into the same price bands where premium Indian whiskies are growing. And the impact, according to industry observers, does not stop there. The agreement also covers UKmade gin, opening the door for more white spirits at competitive prices. Wine, for now, has been kept out of the duty cuts, but once negotiations with the EU and other countries such as New Zealand and Chile resume, it too may come into play. The larger point is that the challenge is not confined to whisky alone. India’s wider portfolio of spirits and wines will all feel the ripple effects as foreign products gain easier entry.

Fair Play Concerns

The concern here is not about competition itself. Indian makers have proven they can compete. Our single malts and blends are already winning acclaim worldwide. But competition must be on fair terms. Many of the concessions for imported brands, such as lower fees for registering brands and excise duties in certain key states, have not yet been revised in light of the falling central customs duties. Unless these distortions are addressed, the playing field will remain tilted.

Out of every 100 bottles sold, 96 carry an Indian label. “Walk into a liquor store in India, and the shelves tell a simple truth: whisky is ours,” Anant remarks. But if one looks closely at the key consumer-facing shelves, something has been changing. Those rows once dominated by Indian premium brands are slowly being filled by Scotch and other imported spirits, and the same is happening with wines. This is where the duty cut really bites. Imports, which were already growing at more than 20 percent a year, now get a further tailwind. That does not topple the market overnight. Indian whiskies will still sell in millions of cases, but the battlefield shifts. The squeeze comes at the premium and luxury end, the very zone where Indian brands are starting to write a new story.

Single malts made in India are winning awards abroad, and luxury blends carry the weight of ‘Made in India’ pride. In terms of volumes, Indian whiskies risk growing more slowly as Scotch gains pace. In terms of positioning, the narrowing price gap means that premium consumers, particularly in the ₹1,500–3,000 band, India’s fastest growing segment, may well ask, ‘Why not pick a Scotch?’ The danger is not that Indian whisky disappears, but that the space for Indian brands to climb the value ladder, to win recognition at home as well as abroad, becomes more crowded. For consumers, this may look like more choice, but for India, it risks dimming the spotlight on a homegrown success story just as it is beginning to shine and outpace imports, as, for example, with Indian single malts.

CIABC’s 3-Point Plan

CIABC’s job now is to make sure this opening up does not leave Indian companies exposed. “Our engagement with policymakers is about action, not rhetoric,” Anant says. The focus is threefold:

• Fixing state-level imbalances: Brand-registration fees and duties created in the 150 percent-duty era need updating for today’s tariff reality.
• Guarding against predatory pricing: Since the FTA excludes a minimum import price, India must keep mechanisms ready to respond if imports undercut aggressively.
• Tackling non-tariff barriers abroad: Indian whiskies face challenges beyond tariffs, from strict definitions of what qualifies as ‘whisky’ to packaging sizes and labelling rules.

Pricing & Consumption

According to Anant, “Consumers will definitely see greater choice, with more Scotch and white-spirit brands, more variants, and a broader portfolio at different price points. British exporters will bring in products they previously held back because the margins were thin. But when it comes to actual price relief, the story is very different.”

A comparison of Delhi, Haryana and the UK shows that many Scotch labels are already retailing in India at or below their home-market price, even with the 150 percent duty in place. For example, Johnnie Walker Black Label is at ₹3,310 in Delhi versus ₹4,153 in the UK, and Ballantine’s Finest is at ₹1,400 in Haryana versus nearly ₹3,000 in the UK. So, when duties fall to 75 percent, consumers may see a reduction at the shelf of perhaps 5–10 percent in some states. The real outcome will be that imported brands will use this extra headroom to expand aggressively, compete in price bands occupied by luxury Indian brands, and capture more share.

As Anant elaborates, “Consumers do not walk away with significantly cheaper bottles; they walk into shops with more imported labels and fewer competitive Indian choices. That is why CIABC’s concern is not about consumer access but about ensuring that Indian spirits are not pushed into a corner in their own home market, while foreign brands already selling cheaper here than abroad gain an even bigger advantage.”

Guarding Indian Labels

Broadly, cheaper bulk Scotch gives Indian whisky makers some relief in costs and an opportunity to improve blend quality, meaning consumers are more likely to encounter upgraded offerings rather than sharply reduced prices. The ₹1,500–3,000 segment, where Scotch is set to push more aggressively, is also the growth zone for Indian premium whiskies and white spirits such as gin.

The good thing is that Indian companies are not entering this phase unprepared. In fact, the last five years have been a rehearsal for this very moment. Domestic players have built credibility in premiumisation, with Indian single malts winning global awards and commanding respect on international shelves. They have invested in innovation from cask finishes and small-batch releases to packaging upgrades that elevate perception, and strengthened distribution to ensure that Indian whiskies remain widely available across retail and on-trade outlets where Scotch struggles to scale as quickly.

Winners & Losers

One major factor in India is that state-level taxes remain high and vary widely, meaning consumers will not feel the same price relief everywhere after duties are reduced. The truth is that the impact of duty cuts will not be the same across states. “A bottle of Scotch could see a 10 percent drop in one state and 5 percent in another,” Anant points out.

From CIABC’s perspective, the biggest winners of the India–UK FTA are British exporters, who gain immediate access and room to expand. Indian blenders who use cheaper bulk Scotch to lower costs and improve blends will also benefit. At risk are premium Indian whiskies, which face tougher price competition in their growth zone. Consumers face a mixed scenario, gaining variety and some price adjustment. States are the potential losers if revenue streams become destabilised by shifting consumption patterns.

However, beyond the immediate challenges, the FTA opens doors. Lower duties on Scotch create scope for collaborations with UK producers, innovation in premium blends, and joint ventures. At the same time, Indian single malts, already making their mark globally, can use this moment to push harder for exports. “How companies choose to leverage these opportunities will shape the next chapter of the industry,” Anant opines.

No Reciprocal Access

The headline number for Indian whisky under this FTA is simply zero. The UK already charges no customs duty on spirits, so unlike Scotch entering India, there isn’t a tariff breakthrough waiting for Indian brands in Britain. That’s why Indian producers have long argued that the real obstacles aren’t tariffs but non-tariff barriers.

The foremost barrier is definition. In the UK, whisky can only be called whisky if it is cereal-based, matured in wooden casks for at least three years and bottled at 40 percent alcohol or higher. Single malts do qualify, but they still face other frictions, such as having to switch to 700 ml bottles instead of India’s 750 ml, or ensuring every label and age statement passes strict checks. “There’s also the matter of climate. In India’s tropical conditions, maturation happens faster because evaporation is higher. A 3-year-old Indian malt can often taste older than a Scotch of the same age. Yet international rules do not recognise this advantage. What matters abroad is compliance with definitions, not the reality of how spirits mature here,” Anant elaborates.

So, while Scotch gets cheaper access to Indian shelves through the FTA, Indian whisky still faces a long compliance road before it can claim real space in the UK. That does not mean there is no opportunity; it simply means the opportunity lies in aligning with global standards and clearing regulatory hurdles. For Indian whisky, the benefits are less about tariff relief and more about learning to compete within the framework of non-tariff rules that shape global trade. “Hence our task has been to remove the nontariff barriers and allow our whiskies to be sold as Indian whisky. And that goes for other spirit categories too,” Anant states.