Scotch Whisky Breakthrough: Historic Tariff Deal Opens India’s Doors
The recent landmark trade deal between the UK and India – cutting Scotch Whisky tariffs from 150% to 75%, with further reductions planned – could unlock transformational growth for the category. The Scotch Whisky industry may be facing flattening growth in some traditional markets, but India, with its 1.4 billion population and rapid middle-class expansion, offers a game-changing opportunity, as rising disposable income fuels demand for aspirational products like Scotch, which holds deep cultural resonance in a nation where Whisky dominates global consumption but Scotch still accounts for just 3% of the market.
Changes expected to a market currently dominated by domestic spirits
India is already the world’s largest consumer of Scotch whisky by volume, with £248m exported from Scotland in 2024, a +13.8% increase since 2023. However, India’s USD 22 billion Whisky market is dominated by domestically produced whiskey classified as “Indian Made Foreign Liquor” (IMFL), rather than internationally imported spirits. Premium segments are growing fastest, with USD 30 billion sales forecasts by 2030. Despite its aspirational appeal, Scotch whisky accounts for just a fraction of the market. Why? Tariffs of 150%–250% in some states have made imported Scotch Whisky largely unaffordable. In addition, the existing market for scotch is dominated by lower-value Bulk imported scotch that’s typically used for Blends.
India opens up to Scotch: Landmark tariff cuts reshape market access
That reality could be about to change. After 16 rounds of bilateral trade negotiations following Brexit, the UK and India signed the largest UK-led trade agreement since leaving the EU. A centrepiece of this deal is a reduction in Scotch Whisky tariffs from 150% to 75%, with a glide path down to 40% over the next decade. The Scotch Whisky Association (SWA) estimates this could unlock up to £1 billion in additional exports over five years. For whisky producers, distributors, and investors, this is a catalytic moment.
Based on industry forecasts and simulated data from our own distribution channels, Speyside Capital projects that imports of Scotch whisky into India will grow to over £600 million per annum within the next five years, potentially making India the second-largest market in the world for Scotch whisky exports.
From restriction to expansion: A country ready for Scotch
India’s vast population isn’t just large, it’s young. Over 45% of the population is under the age of 25. This youth segment is increasingly urban, connected, and aspirational, associating international spirits, especially Scotch, with status and modernity. Meanwhile, India’s middle-income class is booming. From just 50 million in 2000, it is projected to exceed 370 million by 2030. Disposable incomes are rising, consumer tastes are maturing, and Scotch whisky is well-positioned to benefit.
India’s market is no longer a future dream
India’s complex federal tax structures and logistical hurdles remain a challenge—but innovations in distribution, growing ecommerce channels, and a thirst for authenticity and heritage give Scotch whisky a unique advantage.
India’s whisky market is not a future dream, – it’s an active, competitive battlefield. And for Scotch, it’s a once-in-a-generation opportunity to shift from niche import to dominant premium category.
Speyside Capital Engage in India-Scotland Business Meet 2025
Our Chairman, Manoj Karkhanis, had the distinct honour of attending the India-Scotland Business Meet 2025 at the City Chambers, Edinburgh earlier this year, as Speyside Capital continue to align its efforts with key stakeholders and thought leaders to shape the future of Indian and Scottish trade relations.
