Not Foreseeing Domestic Hit Due To Tariff Cuts Given To UK Whisky: Official

The government does not expect any adverse impact on domestic alcohol manufacturers from the tariff concessions granted to the UK whisky under the India-UK Free Trade Agreement, senior officials told NDTV Profit.

According to official estimates, a large portion of whisky imported from the UK is used as a raw material for producing blended whisky in India. With tariffs now lowered, the input cost for these blends is expected to fall, creating a competitive edge for Indian alcobev companies in global markets.

Officials added that the production of blended whisky in India is likely to rise, leading to stronger export potential. India’s blended whisky exports have already registered a 34% growth over the previous year, a trend that is expected to gain further momentum.

The government's assessment suggests that the tariff cut will enhance India’s position as a hub for blended whisky manufacturing without threatening the domestic beverage industry.

Earlier in the day, NDTV Profit had reported that while customs duties on imported spirits will fall in phases, with tariffs on premium Scotch falling from 150% to 75%, then 40% over the next decade, how much cheaper the bottles get depends largely on Indian states' excise and pricing policies.

Excise collections are a key revenue source for states, and many are expected to adjust the ex-distillery price or excise duty to protect their revenue. This can blunt the price cuts expected at the consumer level. Multinational companies may offer modest price reductions of 5–7% in the first six months to 12 months but are likely to reverse them gradually.