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2025-07-30 17:59:06
Scotch Whisky's Dilemma in India: Why is Joy So Hard to Receive Even with a Halved Tariff? (1) Although India's trade agreement with the UK halved the import tariff on Scotch whisky to 75%, this doesn't seem to bring much joy to Indian consumers. (2) The reason is that the price of alcoholic beverages in India is primarily influenced by high local taxes levied independently by each state. (3) Industry experts estimate that even with the tariff reduction, the final price drop for imported whiskey will be less than 10%, and some states may even offset the tariff benefits by raising local taxes. (4) A foreign company executive noted that tariffs account for less than 25% of the total product price in most states. (5) Naveen Malpani of consulting firm Grant Thornton Bharat stated that import tariffs average only 10% to 20% of the retail price, with the rest consisting of local taxes and other costs. (6) This means that the trade agreement is more likely to promote premiumization and brand diversity rather than trigger an immediate surge in demand. (7) Despite the high tax burden, the Indian spirits market was valued at $37 billion last year, second only to China and the United States, and remains attractive. ⑻ Last year, Diageo and Pernod Ricard generated combined revenue of nearly $6 billion in India. ⑼ India is the largest export market for Scotch whisky by volume, with exports exceeding 192 million bottles in 2024, representing over 200% growth over the past decade. ⑽ However, a complex tax and regulatory system, along with annual approvals for bottle labels and pricing, makes doing whisky business in India challenging. ⑾ Against this backdrop, Indian single malt whiskies are rapidly gaining popularity, winning over young consumers and posing fierce competition to international brands.
