Scotch Whisky Market: India Surpasses France To Become Largest Market In UK

According to the most recent statistics provided by the trade group Scotch Whiskey Association (SWA), India has surpassed France to grab the top spot as the UK’s largest Scotch whisky market in terms of volume, with imports increasing by 60% in 2022 over the previous year.

According to the figures, India imported 219 million bottles of Scotch last year, compared to France’s 205 million, an increase of more than 200% over the previous ten years. However, scotch whisky only makes up 2% of the Indian whisky market, despite the double-digit volume increase. The SWA cited hefty tariffs as the cause.

Expert’s Opinion- The craze for Premium Whiskey.

According to Amar Sinha, chief operating officer at spirits producer Radico Khaitan, which introduced Royal Ranthambore Heritage Collection whisky, India is a largely brown spirits market, and this trend is here to stay. In the last five years, a profusion of Indian whiskies has emerged, most of which are Scotch blends, according to Sinha. 

The nation has noted that demand for premium whiskies has increased considerably, he continued. Industry leaders who drink whisky frequently prefer to stick with it and avoid other alcoholic beverages like vodka, rum, or even beer.

The Whisky market is witnessing fresh consumers- A driving force for India to become superior in the Whiskey market.

People think that the whisky market in India has enormous growth potential, driven by a burgeoning number of new consumers who are eager to try new things and be creative, according to Guirec Danno, managing director of global brewer Distell Asia Pacific, which offers an exclusive partnership with premium liquor importer and distributor Aspri Spirits in India. 

Along with Aspri Spirits, Scottish Leader was introduced in India two years ago by the South African company Distell. According to Danno, they are introducing vigor to the booming Indian market for Scotch whisky. He said that to advance their collaboration, Distell and Aspri will take advantage of the rapidly expanding Scotch whisky industry in India.

Whiskey is not just a beverage but a key trade relation between nations.

Alcoholic drinks are a major area of discussion in the India-UK free trade agreement (FTA) negotiations. Nita Kapoor, CEO of ISWAI, stated that the premiumization trend in India is fresh and hopefully would be continued over time and create a development platform under bilateral negotiations (FTA) for make-in-India and exports from India businesses (International Spirits and Wines Association of India). The completed goods, including those bottled in India, are included in the 2% Scotch whisky, according to Kapoor.

In light of current discussions between India and the UK for a free trade deal, India’s alcohol sector has reported a 40% rise in whisky imports in the first eight months of this fiscal year compared to the entire fiscal 2021–22. (FTA). India imported whisky of $278.47 million from April to November 2022–23, compared to $199.02 million for the entire FY22. 

In the first eight months of the current fiscal year, imports from the UK totaled about $200 million, as opposed to $148 million in the whole fiscal year that concluded in March 2022.

Tariffs-The point of concern in Indian Whiskey markets.

Concerned that tax exemptions in the trade agreement might boost imports and harm domestic businesses, the Confederation of Indian Alcoholic Beverage Companies (CIABC) has brought up the issue of rising tariffs with the commerce and industry ministry. The association’s members include businesses including Radico Khaitan, Amrut Distilleries, and Sula Vineyards. According to the report, the growth in imports invalidates the UK’s accusations that Scotch whisky is not given enough possibilities in India.

The UK is interested in a decrease in the existing 150% tariff on Scotch whisky as part of the trade agreement. There have been discussions of lowering the customs tariff gradually to 50% and importing whisky in barrels from the UK rather than bottles so that bottling and packaging may take place in India.

The parent business in the UK sells Scotch whisky to its Indian affiliate for just Rs 175 per bottle that is sent to Delhi. In Dubai, a bottle of the identical product costs around Rs. 450–460. Another issue to consider is this underpricing, according to experts. People said that states such as Maharashtra had provided special discounts to imported Scotch whiskies in a move to offset the customs levy, making foreign liquor more appealing.

The last call- why does the Indian market present an opportunity for whisky brands?

India has a very favorable climate, and consumer confidence is rising. Despite inflation, it’s definitely at an all-time high. And with the continued rise in the upper and middle classes, along with the urbanization of society, brands continue to profit from favorable long-term demographics.

Edited by Prakriti Arora