India will begin cutting its 150% import tariff on British whisky and gin this month under a landmark free trade agreement with the United Kingdom, opening the world’s largest whisky market further to overseas producers while offering domestic distillers a decade to adjust.
The India-UK Comprehensive Economic and Trade Agreement (CETA), together with the Double Contribution Convention (DCC), will enter into force on July 15, marking one of the most significant market-opening measures for the global drinks industry in recent years.
At the centre of the agreement is India’s commitment to reduce its 150% import tariff on British whisky and gin. The duty will be cut immediately to 75% before falling to 40% by 2036,, significantly improving the competitiveness of British spirits in one of the world’s fastest-growing premium alcohol markets.
India’s Minister of Commerce and Industry, Piyush Goyal, described the agreement as the most comprehensive trade pact India has signed to date and said it could become a model for future free trade agreements.
“I have absolutely no doubt in my mind that this will be a success,” Goyal said during a visit to London. “This CETA will become a template and a role model for many future free trade agreements.”
He added that the deal extends well beyond tariffs, encompassing cooperation in technology, education, culture and the arts to strengthen long-term ties between the two countries.
Lindy Cameron, the UK’s High Commissioner to India, described the agreement as a cornerstone of the two countries’ Vision 2035 strategic partnership, estimating it would generate nearly £5 billion in additional GDP over the long term.
A landmark win for Scotch whisky
Few sectors stand to benefit more than Scotch whisky.
The Scotch Whisky Association described the agreement as one of the industry’s most significant market-access breakthroughs in decades. It estimates the deal could boost Scotch whisky exports to India by £1 billion over the next five years while supporting around 1,200 jobs in the UK.
The UK government likewise expects food and drink exports to become one of the fastest-growing components of bilateral trade, driven largely by rising demand for Scotch whisky from India’s rapidly expanding middle class.
The tariff reduction, however, will be phased in over 10 years rather than implemented immediately, a compromise widely seen as giving India’s domestic spirits producers time to adjust while gradually opening the market to greater international competition.
The world’s largest whisky market
According to the IWSR, India is now the world’s largest whisky market, consuming more than 250 million nine-litre cases annually.
Trade data underscores the market’s continued expansion.
Figures from India’s Ministry of Commerce and Industry show the country imported 72.1 million litres of whisky in 2025, up 15% year on year, valued at US$449 million, an increase of 10.5%.
The UK remained India’s largest whisky supplier, exporting 55.5 million litres worth US$284 million. Imports from Britain increased 20% by volume and 16% by value compared with the previous year.
Britain is also India’s second-largest supplier of gin.
India imported 2.61 million litres of gin and genever in 2025, a 52% increase from a year earlier, with imports valued at US$14.5 million. Shipments from the UK rose 68% by volume to 850,614 litres, while their value climbed 55.8% to US$3.81 million.
As tariffs fall over the next decade, British whisky and gin are expected to become increasingly price competitive.
Lower tariffs won’t solve India’s market complexity
For international producers, however, the agreement removes only one barrier.
Over the past year, India has accelerated trade negotiations with partners including New Zealand, the European Union and the European Free Trade Association as part of a broader push to liberalise trade.
Yet India’s alcohol market remains one of the world’s most fragmented.
While the federal government sets import tariffs, individual states retain broad authority over alcohol regulation, including excise taxes, licensing, label approvals, pricing and retail distribution.
For importers, that means entering India is less like accessing a single national market than navigating dozens of separate ones. Companies often must secure approvals and pay taxes state by state, making compliance significantly more complex and costly than in most major alcohol markets.
The Confederation of Indian Alcoholic Beverage Companies welcomed the phased tariff cuts, saying they give domestic producers time to adapt while urging state governments to reform local excise and alcohol taxation policies.
For overseas spirits producers, lower tariffs reduce the cost of entering India. But industry executives say long-term success will depend less on import duties than on building strong distribution networks, developing local operations and successfully navigating the country’s patchwork of state regulations.
As India continues to pursue trade liberalisation, one of the world’s most protected alcohol markets is gradually opening. Yet while tariffs are coming down, the country’s fragmented regulatory system remains the industry’s biggest hurdle.
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