India is set to become the world’s largest market for Scotch whiskey in terms of both value and volume in the next few years, according to Scotch Whiskey Association chief executive Mark Kent CMG, who attributes this growth to the intensity of competition, the trend towards premiumisation and strong economic expansion in India.
India has already reclaimed its position from France as the world’s largest Scotch whiskey export market, with 192 million bottles shipped, according to the latest SWA figures, although it is among the top five in terms of value.
The US currently leads by value, but the SWA chief is “optimistic” that a combination of market growth and a more competitive import environment following the UK-India FTA will also position India as the largest in terms of value, PTI reported.
Partnership with Indian single malt producers
SWA is actively looking for a new era of partnership with India, not only to export to the UK market but also to jointly explore other global markets.
Mark Kent has praised the rise of Indian single malt whisky, noting its recent success in winning several prestigious international awards. He plans to talk to the Indian Malt Whiskey Association about a partnership, as both sides share the same views on the importance of quality in production and collaboration.
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This collaboration is seen as a significant opportunity for both Indian and Scottish industries. “There is an opportunity for Indian companies to increase exports of Indian single malt to the UK and forge partnerships for global markets. So it’s really a time for both sides to seize it,” he told PTI.
However, he noted that the success of the market will also depend on certain factors surrounding the global economy. Mark Kent said he was optimistic that India had “a very educated knowledge of Scotch and whisky”.
Impact of the India-UK Free Trade Agreement
The India-UK Free Trade Agreement is poised to be a major catalyst for the predicted growth of the Scotch whiskey market. Under the deal, which is pending ratification, India will reduce the duty on British whiskey and gin from 150% to 75% and then to 40% in the 10th year of the agreement.
Mark Kent, who visited India in October this year as part of British Prime Minister Keir Starmer’s delegation, believes that the free trade agreement will have several mutually beneficial outcomes for both countries.
— more variety: A number of quality Scotch whiskeys will enter the Indian market, particularly from some of the smaller producers from Scotland.
— Increase to IMFL: Bulk Scotch imports will also increase. This is particularly beneficial as the duty will drop on bulk whisky, which accounts for 79% of all whiskey exported to India, resulting in cheaper and more competitive imports for Indian producers to include in Indian Made Foreign Liquor (IMFL).
— Investments: The deal is expected to bring more investment in both India and Scotland.
The SWA chief acknowledged that while the reduced external tariff is expected to reduce costs for consumers and boost sales, the ultimate impact on retail prices will also depend on individual state regulations and tax frameworks.
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“It will depend on individual states and their own regulation and their own tax framework and it will depend on individual companies. It’s fair to say that you will see a reduction in consumer costs, but that will depend on each individual situation, both states and individual companies,” Mark Kent was quoted as saying by PTI.
On whether the association will talk to some state governments about this aspect, he noted, “The trick is to find the right regulatory framework and tax framework that will allow market pricing, which in turn will bring more investment, more trade, and that will in turn bring more excise revenue to individual states, and we are very happy to work with the Indian associations and the Indian government to find those optimal outcomes.
