On Wednesday, an industry association pointed out that India’s robust long-term economic growth and its domestic demographic makeup provide ample opportunities for both Indian and Scotch whiskies to thrive in the world’s largest whisky market.
The Scotch Whisky Association (SWA) additionally conveyed that the potential decrease in import tariffs as part of a free trade agreement between New Delhi and London would not only enhance the export prospects of Scotch whisky from the UK but also usher in increased variety for consumers, thanks to the entry of smaller producers into the market.
India and the UK are currently in discussions to establish a free trade agreement.
It will also lead to reduced import costs, benefiting India-Made Foreign Liquor (IMFL) brands.
The association also said that imported Scotch whisky will pose “very little” direct competition to local Indian whisky because of its small size here.
SWA stated that a significant proportion of Scotch whisky exports to India is in bulk, with bottled versions accounting for only 24 percent of total exports. Moreover, the majority of Scotch whisky sold in India is locally bottled.
India and the UK are continuing their negotiations to iron out differences in the proposed free trade agreement (FTA).
Following the G20 Trade and Investment Ministers Meeting (TIMM) at Jaipur, the progress of the negotiations was reviewed by Commerce and Industry Minister Piyush Goyal and UK’s Secretary of State for Trade Kemi Badenoch on August 26.
As New Delhi gears to host the 18th G20 Heads of State and Government Summit, SWA and International Spirits and Wines Association of India (ISWAI) jointly look forward to a successful India-UK Free Trade Agreement (FTA).
Over substantial reduction in India’s 150 per cent tariff on import of Scotch whisky, SWA CEO Mark Kent said it will pose very little direct competition to Indian whisky.
“Demographics and the strong prospects for India’s long-term economic growth mean there is plenty of room for Indian and Scotch whiskies to prosper in the world’s biggest whisky market. Only 24 per cent of exports to India are bottled in Scotland. Most Scotch whisky sold in India is bottled locally, while bulk Scotch whisky is an important ingredient in Indian whisky,” he said.
As the IMFL and Scotch categories have grown, so has the investment in facilities in India and the jobs and growth that delivers, both in the tourism and hospitality industries, he added.
Scotch whisky is the world’s most traded spirit, with worldwide consumption of 1.3 billion bottles.
However, it is less than half the volume of Indian whisky production.