Scotch Whisky exports to grow by £1 bn over five years

India, the world’s largest whisky market, presents immense growth opportunities for Scotch whisky despite its current limited share due to high import tariffs and regulatory barriers. As interest in premium spirits surges, Scotch’s unique heritage and craftsmanship are capturing attention. Mark Kent, CEO, Scotch Whisky Association, has been at the forefront in addressing market challenges and fostering collaborations since he took charge. In this engaging conversation, Mark shares his insights with Vikal Samdariya on navigating complexities and unlocking opportunities in the dynamic market of India and the potential impact of the UK-India Free Trade Agreement.

As a seasoned diplomat and leader of the SWA, what do you see as the key challenges facing the Scotch whisky industry today? How do you view the Scotch whisky’s innovation efforts to adapt to shifting consumer preferences, and what strategies would you recommend to ensure Scotch remains a globally preferred category, especially in India? 

As is the case for many other premium global exports, 2024 was challenging. This did not come as a surprise, given the volatile international situation affecting global industries and the inflationary pressures that were fed through to consumers across global markets. But as an industry that has been around for over 500 years, we’re confident in the long-term growth opportunities and the industry’s resilience in the years ahead.

Consumers around the world are still looking for premium products, and Scotch whisky has an important role to play in that. As people become more informed about the provenance and styles of Scotch whisky and the different ways it can be enjoyed, including neat or as part of cocktails, we’ve seen them trading up, and premium exports continue to grow.

Highlights 

• The UK-India Trade Agreement talks are likely to be back on track in 2025.
• The international team is collaborating with India’s Department of Business & Trade to address the challenges in market.
• Phased tariff cuts could grow Scotch whisky exports by £1bn and increase the Indian government revenue by £3.4bn.
• Despite challenges, 12 new Scotch whisky distilleries have opened, pushing the total distilleries to over 150 across Scotland.

 What role does the SWA play in facilitating Scotch whisky exports and fostering global market linkages? Specifically, how does SWA plan to expand Scotch whisky’s presence in India, including initiatives to strengthen collaborations with domestic partners and build deeper consumer connections?

Our international team has worked closely with Department of Business and Trade and officials in India to identify barriers to market and support our members in navigating complex and changing requirements, including customs validation procedures and labelling requirements.

These can be complex issues that often restrict market access to SMEs and require proactive, collaborative, and, in some cases, creative solutions. There can be significant opportunities for both UK and Indian businesses if these challenges are surmounted.

We also work in tandem with domestic organisations, like the International Spirits & Wine Association of India, to support their work on uniform alcohol guidelines in India.

India has become the largest market for Scotch whisky, with a remarkable 17.3 percent growth in the first half of 2024, despite a 150 percent import tariff. To what factors do you attribute this impressive growth? How sustainable is this growth in light of the increasing popularity of the Indian single malts and Japanese and Irish whiskies?

Despite India being the largest global whisky market, Scotch whisky has only a 2 percent share due to high import tariffs, state-level excise duty taxes, and other market access barriers. So, there’s a lot of room for potential growth. In 2019, single malt whisky exports to India were valued at £19.8 million, increasing to £31.1 million five years later.

As interest grows in the wider whisky category, consumers inevitably discover Scotch on their whisky journey due to its unique heritage and craft. It’s the world’s number one internationally traded spirit, and more Scotch is enjoyed worldwide than American, Irish, and Canadian whiskies combined. This is only possibly because the industry produces a huge and diverse range of consistently high-quality spirit.

Innovations at Distilleries 

With over 150 different Scotch whisky distilleries across Scotland, we know that there’s a Scotch for every palate. There are distilleries that produce offerings that are known across the world and distilleries that produce whiskies that are only sold in the domestic market. We know that consumers are also drinking their Scotch whisky in different ways around the world—in cocktails, as highballs, with ice—and whatever their preference, there is a whisky for them.

Within the Scotch Whisky Regulations 2009, distillers have been able to be experimental while still producing a product that is undeniably Scotch whisky—with just three natural ingredients of water, cereals, and yeast. Some distillers are trying different forms of yeast, including sake yeast, while others are finishing their products in ex-beer casks. A few have even experimented with rye whisky, not commonly seen in Scotland.

There are a huge number of options for distilleries looking to produce something different, and equally, a huge number of consumers who are looking for something different to suit their palate.

The Free Trade Agreement between the UK and India is yet to be finalised. When do you foresee it being signed, and how is this delay impacting the growth prospects of Scotch whiskies in India? Once the FTA is in place, what kind of growth trajectory do you anticipate for Scotch whiskies in this market?

We’ve welcomed the news that the UK government has picked up negotiations on a UK-India trade agreement again in 2025. Securing a deal that reduces the tariff would be a major boost to the industry and help mitigate the impact of a slowdown in other global markets.

The phased reduction of the tariff would benefit industries in both the UK and India and could see the value of Scotch whisky exports grow by £1bn over five years. This step would also see an increase of £3.4 billion in revenue to the Indian government.

“Total scotch whisky exports to India were valued at £166m in 2019, increasing to £218m four years later in 2023. We have welcomed that the UK government has picked up negotiations on a UK-India trade agreement again in 2025.”

Please provide an overview of Scotch whisky’s growth in the recent years, including the addition of new distilleries and the overall future outlook for the industry.

Despite the turbulence of the last five years, we’ve seen 12 new Scotch whisky distilleries open across Scotland, bringing us to over 150. The opportunities the industry sees for long-term growth are backed up by the industry’s significant investment in new and expanding distilleries in the past decade as they look to capitalise on opportunities in new and existing markets and with a new generation of consumers. As part of this, we look forward to working with Indian consumers, industry, and government to ensure everyone gains from this continued growth.