India may overtake US as top Scotch whisky market by value as tariff cuts spur premium demand

Scotch whisky consumption in India is growing faster than the overall whisky market, and industry executives expect demand for premium bottles to rise. The UK-India trade deal may make imported Scotch more accessible, though state taxes and regulations will shape price cuts and investment.

India may overtake the US as the world's largest market for Scotch whisky by export value, as lower import duties and rising incomes drive demand for premium spirits, according to the Scotch Whisky Association (SWA), an international drinks trade body.

Scotch whisky exports to India were worth £286 million ( ₹3,614 crore) in 2025, making it the world's largest market by volume but the third-largest by value, after the US and France, said Ian Duddy, the association's international director. Exports were equivalent to about 220 million bottles and have been growing at 8-9% annually despite high import duties, he said.

"India is the world's largest whisky market and by far the biggest market for Scotch by volume," Duddy said in an interview, adding that the country's expanding middle class could eventually help it overtake the US in export value.

The opportunity comes as India's whisky consumption grows and trade agreements lower barriers to imported spirits. The India-UK free trade agreement (FTA), which came into force on 15 July after more than three years of negotiations, cuts import duties on Scotch whisky from 150% to 75%, with a further reduction to 40% over 10 years. Rising incomes and a growing middle class could also support demand for premium whisky.

Demand is already rising. India's whisky consumption grew 3.7% to 268.8 million nine-litre cases in 2025, while Scotch grew faster, up 5.3% to 9 million cases. Scotch is projected to grow at a compound annual rate of 5.4% between 2025 and 2030, against 3.6% for whisky overall, according to data from drinks consultancy IWSR, accessed by Mint.

India still trails the US in the value of Scotch whisky exports. Shipments to the US were worth £933 million in 2025, compared with £404 million for France. Globally, Scotch whisky exports totalled £5.3 billion that year.

"The tariff reductions (between the UK and India) have been really important for us," Duddy said. Lower import duties, however, will not translate into equivalent cuts in retail prices, as state excise duties, distribution costs and retail margins also affect the final price. Companies will decide how much of the savings to pass on to consumers.

Lower custom duties

Paul Ross, chief executive of Edrington India, the local arm of the Scottish spirits maker behind The Macallan single malt Scotch whisky, expects retail prices of imported Scotch to fall by 7-10% as the lower basic customs duty feeds through to consumers.

"That can only encourage people to trade up, I think," Ross said. Lower prices could also narrow the gap with overseas markets such as Singapore, Dubai and London, reducing the incentive for consumers to buy bottles abroad. The extent of the reduction will depend on state-level pricing approvals and other taxes.

Douglas Alexander, the UK secretary of state for Scotland, who was travelling to India this month, told Mint that the tariff cuts were already making a difference to importers. He said the agreement could also benefit Scottish exporters of products beyond whisky.

"We see the Indian market not just as 1.4 billion people but as 400 million of the rising middle class," Alexander said. The UK government estimates that the FTA could increase bilateral trade by £25.5 billion a year in the long term.

Bulk imports

About 80% of Scotch whisky exports to India are shipped in bulk, with the remainder sold as bottled products, Duddy said. Some bulk whisky is bottled locally, while some is used as an ingredient in Indian-made foreign liquor (IMFL).

The tariff cuts could support local bottling and distribution. Duddy expects companies to invest more in bottling facilities, warehousing and logistics as trade expands.

"If the free trade agreement works well, we would expect to see an increase in that investment locally in India," he said.

Differences in excise duties and regulations across India's states and territories, however, remain a hurdle for overseas companies. Ross said Haryana could be among the first states to reflect the duty cuts in retail prices, followed probably by Delhi, as state authorities approve revised price lists.

"Indian exporters to the UK benefit from one single market, one set of taxes, one set of regulations," Duddy said. Companies entering India for the first time would be better off focusing on one or two states and building local partnerships, he added.

Premium demand holds the key

The longer-term opportunity for Scotch whisky lies in consumers trading up as incomes rise. Ross said the shift towards premium spirits was already visible, with buyers increasingly willing to spend more on higher-end whiskies.

"People want to drink less, but drink better," he said.

Edrington has seen demand for 25- and 30-year-old expressions of The Macallan exceed expectations, while premium bottles are increasingly finding a place in consumers' home bars. India's single malt market stands at around 360,000 cases, of which the ultra-premium segment accounts for 75,000-80,000 cases, Ross said.

Duddy expects demand for both bulk whisky and bottled Scotch to grow, including at the higher end of the market. Lower duties could make imported Scotch more accessible, while rising incomes and consumers' willingness to spend more on premium spirits could help expand the market beyond its current base.