Scotch wins big in UK-India trade deal as tariffs halved
The UK and India have signed a landmark free trade agreement that will cut whisky tariffs from 150% to 40% over the next decade, in a move celebrated by leading Scotch producers.
The UK and India have officially signed a wide-ranging free trade agreement (FTA) that will see tariffs on Scotch whisky exports cut from 150% to 75% immediately, with a further reduction to 40% over the next decade. The deal, signed in New Delhi during UK Prime Minister Keir Starmer’s official visit, marks a major milestone for the UK drinks sector and is expected to create new opportunities in one of the most sought-after global markets.
The agreement is part of a broader trade package worth nearly £6billion in new investment and export wins, which the UK government says will support more than 2,200 jobs nationwide and generate £4.8 billion in additional GDP annually.
As db reported in May, the FTA contains key provisions for the whisky sector, designed to improve market access in India – the world’s largest whisky market by volume, but one of the most heavily protected due to its steep import tariffs.
Industry welcomes historic deal
Jean-Etienne Gourgues, CEO of Chivas Brothers, the Scotch whisky arm of Pernod Ricard, described the FTA as “a significant step forward for the Scotch whisky industry”.
“Once ratified by UK and Indian governments, this deal will unlock one of the world’s biggest whisky markets and enable us to open Chivas Brothers’ Scotch whiskies up to a wider range of Indian consumers seeking premium, world-class spirits,” he said.
“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. It’s clear that the future of Scotch is global and we believe India will be a key partner in that journey.”
In a further statement, Gourgues added: “Signature of the UK-India FTA is a sign of hope in challenging times for the spirits industry. India is the world’s biggest whisky market by volume and greater access will be an eventual game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine’s.”
He urged both governments to move quickly to ratify the agreement so that “business can get to work implementing the deal”.
A competitive edge for British whisky
India’s current 150% tariff on imported Scotch has long been viewed as a major trade barrier. Under the new agreement, the phased reduction to 40% over ten years will give UK producers a significant competitive edge over international rivals and offer a pathway to stronger brand presence in a fast-growing premium spirits market.
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The UK government estimates that the tariff cuts, coupled with wider regulatory improvements, will increase UK exports to India by nearly 60% in the long run — equivalent to £15.7 billion in additional trade by 2040 — and raise bilateral trade by 39%, or £25.5 billion annually.
The impact is expected to be felt not only in India but also in whisky-producing regions of Scotland, where distilleries and bottling operations rely heavily on international exports for growth.
“A great moment for both Scotch and Scotland”
Nik Jhangiani, interim CEO at Diageo, welcomed the deal as “a great moment for both Scotch and Scotland,” noting that the company would be “raising a glass of Johnnie Walker to all those who have worked so hard to get it secured”.
William Bain, head of trade policy at the British Chambers of Commerce, added: “The signing of this agreement is a clear signal of the UK’s continuing commitment to free and fair trade. It will open a new era for our businesses and boost investment between two of the world’s largest economies.”
He highlighted growing demand among UK firms for closer commercial ties with India, stating: “Currently around 16,000 UK companies are trading goods with Indian companies, and there is high interest in our Chamber Network to grow that.”
Broader strategic partnership
Alongside the FTA, the UK and India signed a renewed Comprehensive and Strategic Partnership agreement, which aims to deepen collaboration across defence, education, technology, and clean energy. The two countries also pledged to strengthen joint efforts to tackle organised crime, fraud and illegal migration, including a framework for sharing criminal records and enforcing travel bans.
Prime Minister Starmer hailed the deal as a “major win for Britain”, saying it would “create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country”.
“We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living,” he said. “We’re determined to go further and faster to grow the economy and raise living standards across the UK.”
Next steps
The agreement still requires formal ratification by both the UK and Indian parliaments. Once enacted, it is expected to open the door for UK producers of Scotch — along with makers of soft drinks, cosmetics, cars and medical devices — to access the Indian market on significantly improved terms.
For Scotch whisky, the road to tariff parity is not immediate, but the commitment to long-term reductions represents a breakthrough after more than two decades of lobbying. As Gourgues noted, “the future of Scotch is global” — and India looks set to play a starring role in that future.
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