Indian alcobev industry divided over India-UK FTA

The recently signed India-UK Free Trade Agreement (FTA) has elicited mixed reactions from India’s alcoholic beverages industry, with stakeholders expressing both optimism and concern over the deal’s potential impact on tariffs, exports, and market access.

The FTA, which proposes a gradual reduction of tariffs on imported spirits, including halving of duties on premium UK gins and whiskies from 150 percent to 75 percent, and eventually down to 40 percent, is being hailed by some as a landmark development, while others are sounding alarm bells over its implications for domestic manufacturers.

Sanjit Padhi, CEO of the International Spirits and Wines Association of India (ISWAI), welcomed the agreement as a “landmark development” for the industry. "The reduction in tariffs offers significant strategic benefits for both countries," he said. "India’s increasingly aspirational and discerning consumers will now have access to premium international brands at more accessible prices. This enhanced choice will elevate the consumer experience and boost growth across related sectors such as tourism and hospitality." He believes the FTA will accelerate the ongoing trend of premiumisation and bolster state revenues.

However, not everyone shares this optimism.

The Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), Anant S. Iyer, voiced serious concerns about the FTA's imbalance. "We have always been asking for a level-playing field for Indian players," he noted. "We only hope that the government has included in the FTA the MIP (Minimum Import Price) which will prevent dumping / under-invoicing and also the removal of non-tariff barriers to ensure better international market access to Indian alcoholic beverages." He cautioned that extending similar tariff reductions in future FTAs with the EU or US could further undermine the domestic sector.

Iyer also highlighted a critical issue of excise policy imbalances at the state level. “We urge the Government of India to advise various states such as Maharashtra, Kerala, Odisha, Rajasthan, Madhya Pradesh etc., which give excise concessions to imported liquor, that they should review these concessions and make them equal to that of IMFL / Indian wines. States should end this discrimination soonest,” he stated.


Prem Dewan, Chairman and Managing Director (CMD) of DeVANS Modern Breweries Ltd., was blunt in his criticism. "The UK-India trade agreement is disappointing for the Indian liquor industry. The FTA does not mention anything about the non-tariff barrier imposed by the UK government by way of the minimum maturation clause, which was the main concern of the Indian industry," he said, emphasising that while the FTA makes UK imports more competitive in India, no reciprocal relief was offered for Indian exports.

Meanwhile, others see the deal as a stepping stone for Indian craft spirits to expand globally. Shekhar Swarup, Joint Managing Director of Globus Spirits Ltd., welcomed the FTA as a gateway to international recognition. "The removal of tariffs will enable Indian spirits to find their way onto UK shelves and compete on a more level playing field," he said. "For Indian whisky, it's an opportunity to receive the acclaim it really deserves. And for Craft Gin, where Indian botanicals and imagination truly come into their own, it marks the beginning of a new chapter."

The divergent views highlight the growing divide within the Indian alcobev ecosystem; between large producers with export ambitions and domestic-focused players fearing intensified competition.

The government has set a target of USD 1 billion in alcobev exports by 2030. However, as Iyer warned, achieving this would be challenging "without ensuring proper market access, especially to the UK, EU, and Australia." The industry continues to urge the Centre to remove non-tariff barriers abroad and review state-level policies that favour imported brands over Indian-made foreign liquor (IMFL).