Scotch may get cheaper, but don’t expect much relief at the liquor store. Tariffs on UK imports have been halved under the India-UK trade deal, but higher state-level taxes mean consumer prices may only dip 8-10 per cent, industry experts said. On the supply side, the reduction in customs duty by half to 75 per cent may boost margins for both British distillers and Indian producers who blend imported scotch with locally made whisky, they added.

“Customs duty typically accounts for around 20 per cent of the MRP across the country, while the bulk of taxes are imposed by the states. A reduction in duty by half could bring down consumer prices only by 8-10 per cent,” an industry representative said on condition of anonymity.

New scotch brands may enter with “aggressive pricing”

Under the trade deal, India will immediately reduce tariffs on scotch and blended whisky imports by half to 75 per cent, and then gradually to 40 per cent over ten years, once the deal is ratified domestically by the two countries. The revision will apply to both bottled-in-origin (BIO) and bulk imports.

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According to Anant S Iyer, director-general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), the tariff reduction could lead to newer scotch brands entering the domestic market with competitive pricing.

“Our fear is that a lot of new scotch brands from the UK can come in. These brands may not be famous here today, but they can come in at really aggressive prices that are comparable to Indian premium whisky. Already, some standalone importers are bringing in BIO whisky under 150 per cent duty with aggressive pricing,” Iyer said.

States levy most taxes, customs duty a small part

Popular British scotch brands that could become slightly cheaper include Chivas Regal, Ballantine’s, Glenlivet, Glenfiddich, and Johnnie Walker. Whisky was the UK’s fifth-largest export product to India in 2024-25, valued at roughly $260 million, up 16 per cent from 2023-24.

“Import duties contribute only a fraction of the final price, with state excise, logistics, and distributor margins forming a large share of consumer cost. From a market standpoint, the FTA is more likely to influence product availability and premiumisation than spark a sudden demand surge. UK whisky makers may use this as an opportunity to expand brand presence,” said Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat.

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Industry expert Vinod Giri said a brand like Black Label in Delhi, priced at around Rs 3,500, may only get Rs 200-300 cheaper if the entire duty cut is passed on.

Scotch tariff cut may lift margins for Indian blenders

While the reduction in consumer prices may not be much, British exporters and domestic producers who blend imported scotch could see their margins improve. Scotch is typically blended with Indian-made whisky in proportions ranging from 2 to 30 per cent, depending on the product’s price segment. Popular whisky brands that blend imported scotch include Blenders Pride and McDowell’s No. 1.

“Any duty reduction on Scotch whisky means the cost of production for Indian whisky makers who import it for blending goes down to that extent. While it’s not likely to reflect in consumer prices, the fact is that if their costs go down, their bottom lines improve,” Giri said.

“Indian blenders will have savings per case. It depends on how much quantity of vatted malt scotch is used in the blends, and hence there will certainly be savings for them,” Iyer added.

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Duty cut could hurt bottling in India

According to Giri, the reduction in customs duty will also result in bottled-in-India (BII) whisky becoming BIO over a period of 3-4 years. “With standard Scotch whisky, if the entire duty cut is passed on, prices may drop by Rs 100-150 a bottle, bringing them close to BII whisky, which sells for around Rs 1,500. BII is also Scotch, just imported in bulk to avoid duties on packaging and other costs,” he said.

“But with the new duty set to drop to 75 per cent and then gradually to 40 per cent, it makes little commercial sense to bottle locally, invest in factories, and deal with operational hassles. Production costs are already lower in Scotland due to scale efficiencies, so they might as well ship scotch bottled from there and improve margins,” Giri added.

100 Pipers, Teacher’s, Black Dog, and Black & White are among big brands that bottle imported scotch in India.

Scotch distillers in the UK have welcomed the reduction in tariffs, which will give them greater access to the world’s biggest whisky market by volume. “The deal will support long term investment and jobs in our distilleries in Speyside and our bottling plant at Kilmalid and help deliver growth in both Scotland and India over the next decade,” said Jean-Etienne Gourgues, Chairman and CEO of Chivas Brothers, the firm behind popular whisky brands such as Chivas Regal and Ballantine’s.