Scotch Whisky Industry Seeks UK Support for India FTA

London, Jul 29 (PTI) The Scotch whisky industry has called on the UK government to alleviate a growing tax burden on distillers in order to fully benefit from the Free Trade Agreement (FTA) signed with India.

The India-UK Comprehensive Economic and Trade Agreement (CETA), signed during Prime Minister Narendra Modi's UK visit last week, will see Scotch whisky tariffs slashed in half over time once it is enforced following UK Parliament ratification.

The cost to export these bottles to India will reduce immediately from 150 per cent to 75 per cent and then drop further to 40 per cent over the next 10 years.

“The FTA will bring long-term benefits for the industry, but the industry needs immediate support in order to realise the deal's full potential,” said Mark Kent, Chief Executive of the Scotch Whisky Association (SWA).

“Distillers, especially smaller ones, are under significant pressure now – including as a result of tariffs in the US and a growing tax burden in the UK,” he said.

The trade body representing the industry welcomed the FTA as a “historic moment”, which it had “long championed” as an important milestone to reducing tariffs on Scotch whisky in a growing market such as India.

“Action by the UK government to alleviate these pressures will ensure distillers are in the best position to take advantage of the UK-India FTA once it comes into force,” said Kent.

According to latest SWA figures, India regained its position from France as the world's number one Scotch whisky export market by volume, with 192 million bottles exported last year, while the United States retained its long-held position as the largest export market by value, worth GBP 971 million in 2024.

However, the figures released in February showed a decrease of 3.7 per cent on 2023 exports by value, leading to the SWA calling on the UK and devolved Scottish governments to provide more support for the industry as distillers warn that the combination of pressure on consumer spending, increased domestic tax and regulation, and turbulent global trade may continue to impact exports into 2025.

“For too long, the industry has been taken for granted, with the misguided and simplistic belief that decisions taken in Scotland and the wider UK won't impact an industry which exports 90 per cent of its product, supports a large local supply chain and plays a valuable part in attracting tourists to Scotland,” SWA's Mark Kent said earlier this year.

“The Scotch whisky industry is a proven driver of economic growth, jobs and investment, and needs an environment free from the shackles of excessive taxation, regulation and uncertain operating costs. The UK government must redouble its efforts to back Scotch producers to the hilt, as promised by the Prime Minister [Keir Starmer],” he added.

The Starmer-led government, meanwhile, described India as an important market for Scotland with 457 Scottish businesses exporting a total of GBP 610 million in goods there last year.

“Our trade deal with India is fantastic news for Brand Scotland, with our goods, businesses and services gaining access to what is projected to be the world's third largest economy by 2027,” said Ian Murray, Scottish Secretary in the Cabinet.

“It's fantastic news in particular for the world-famous whisky industry, with Indian import tariffs slashed on Scotch having the potential to be transformational for the industry. It's also good news for our other national drink, with tariffs on soft drinks cut,” he said.

Soon after the FTA signing last Thursday, UK Business and Trade Secretary Jonathan Reynolds said the millions brought to Scotland each year from the deal “will be keenly felt across local communities, whether that's higher wages for workers, more choice for shoppers, or increased overseas sales for businesses”.

A Department for Business and Trade (DBT) analysis released alongside claims the “landmark” India-UK CETA will deliver a GBP 190 million boost for the Scottish economy as part of the Starmer government's “Plan for Change”.