With the India-UK free trade agreement (FTA) finalised on May 6, 2025, both countries have agreed to double the bilateral trade between them to $120 billion by 2030. Amongst the many sectors set to benefit will be UK’s whisky and gin makers as tariffs on the two spirits are to be halved from the current 150% to 75% before reducing to 40% by year ten of the deal – an announcement that has rattled India’s alcoholic beverage maker’s body, the Confederation of Indian Alcoholic Beverage Companies (CIABC).
The CIABC said on Friday that any import duty cuts in future trade deals on wine could hurt the domestic makers, as concessional tariffs on imported spirit from the EU, US, Australia and New Zealand may flood the Indian market. It also suggested the government to impose a minimum import price clause to prevent inbound shipments of low-cost and low-quality bottled spirits, bulk and bottled wines.
The confederation added that the duty reduction agreed upon by India on Scotch whisky under the free trade agreement with the UK may impact the domestic premium category whisky brands due to the likely influx of lower-priced Scotch whiskies.
The Indian wine market is experiencing significant growth, driven by factors like a shift in drinking culture, increasing disposable incomes, and a growing appreciation for premium wines. The market is projected to reach $802.9 million by 2032, representing a CAGR of 17.01%, according to the IMARC Group. West and Central India, especially Maharashtra currently dominate wine production in India.
It must be noted that India is not providing any duty concessions on British wines and is offering only limited import duty benefits on UK beer under the free trade agreement between the two countries.
“If similar duty concessions are granted on other spirits, including wines under future FTAs with wine-producing countries such as those in the EU, USA, Australia and New Zealand it could place undue pressure on domestically produced quality wine brands by opening the Indian market to lower-priced wine imports,” CIABC director general Anant S Iyer said.
India has given the duty concession on wines to Australia under a trade pact, which came into force on December 29, 2022. In that deal, tariffs on premium imported wine were reduced from 150 per cent to 75 per cent.
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