Despite the cuts in tariffs, Scotland and gin may not be significantly cheaper for Indian consumers: Industry
This is because of several factors, including local tariffs and liquor companies’ reluctance to transfer the proceeds of lower tariffs to consumers, citing narrowing profit margins.
Wine is imported in three different categories.
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First is the high-end bottled bottle (BIO) category – for example, products produced and packaged in the UK, such as Scotch. Here, brands will benefit from lower costs and profit margins due to tariff cuts. However, the Indian state sets the price of alcohol based on its own excise tax or local tax every year and changes it is a time-consuming approval process.
So in the past, even in the case of Maharashtra, prices mostly remained the same even with lowered duties. Any benefits passed on to consumers will be moderate. Many states do not allow domestic manufacturers to rise in prices for a few years, or to do so at a minimum. As cost pressures increase, many companies have been tightened over the past fifty-seven years.
For example, in November 2021, Maharashtra lowered the excise tax on imported wine from 300% to 150%, aiming to reduce prices. But prices have fallen by only 30-50%, and for limited brands, prices have also dropped, so consumers have not benefited from the government's actions.
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The second category involves bulk Scottish imports, which are brought in by Indian companies and are used to fuse locally-branded high-end whiskeys, so-called foreign liquors made in India. Industry data says the reduced responsibilities will reduce costs for companies such as Diageo, Radico and ABD, but they are unlikely to pass on these savings to consumers. They say these companies have been operating under profit pressure and are more likely to use cost relief to protect their profits.
The third part is the Indian bottled (BII) brand, such as 100 Pipers and Teachers, where Scotch whiskey is imported in large quantities and locally. These products lead ₹Anyway, if more international brands come in, there are 1,000-2,000 price segments that face little price, and no matter what, the pricing pressure on global competitors is small, so there is no need to lower prices.
The only benefit for Indian consumers will come in the form of a larger British wine brand.
According to the latest available data, India consumed about 9 million cases of scotch (9 liters per liter) in 2024, either imported in bottles or in bulk and bottled in India. The Indians consumed more than 2 million cases of gin, of which about 250,000 were imported.
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“Overall, at the consumer level there may not be much change. The supplier companies will more likely take the savings from customs duty reductions in their margins by increasing billing price. In Maharashtra where excise duty was reduced on imported products from 300% to 150% a few years ago, companies choose to increase their billing prices thus not really transferring reduction to consumers. It happens because import price in India historically has been very low to offset for high import duties,” said Vinod Giri, Director General of the Indian Brewery Association.
“Even if the company does pass any benefits, the price reduction in consumer will not exceed 10-12%. The gap between the price segments is too wide to have any impact on that level of reduction.” Giri previously held the same position in the alliance of the Indian Alcohol Beverage Company (CIABC) and has been closely monitoring the measure for the past few years.
According to the FTA, tariffs on scotch will immediately drop from 150% to 75%, reducing it by 40% in a decade.
“While this is a welcome move, it may have a short-term impact on Indian products. However, we are confident in the quality of our products. We also hope that this deal can make better use of the UK's Indian products business with ease. It is also crucial to ensure that both countries maintain a level playing field and ensure domestic competition and promote fair competition,” Pal P. John distances families of pal distances families of treas families of treas families.
“The cost of bottles for original brands should also drop. Bulk spirit import prices will also drop, and bottles for Indian bottled products will also benefit a lot. Consumers may not see much price difference, as the company may not change the price change. Globus will make the single malt from Terai Gin and Doaab to produce other spirits.
Luxury, reputation and UP categories may not be immediately felt
Domestic companies believe that since consumers are now mature and understand their products and quality, their high-end products should not feel any calories from international spirits. Fullarton Distilleries, the manufacturer of Pumori gin, was recently acquired by Allied forces and distilleries, which is not expected to change much in sales.
Over the past two years, many Indian companies have focused on making their portfolios more premium to meet more niche consumer needs. For example, earlier this week, Radico Khaitan said that 30% of its fiscal 26 growth will now come from luxury goods.
