The trade deal, which is close to finalisation, will prescribe a minimum import price (MIP) and all bottled Scotch above the threshold will see import duty reduced to 100% from 150%, while those coming in casks could see it halved to 75%. While the details are still being negotiated, there have been discussions around reducing customs duty on bottled Scotch to 50% over 10 years.
Based on the experience with Australia – where customs duty on wine was slashed under the interim FTA – the domestic industry is seeking an MIP of $5 for every 750ml bottle. The calculation is that popular brands, such as Johnnie Walker Black Label and Chivas Regal, will not make the cut as their basic price is just over $4 a bottle, based on an exchange rate of Rs 80 to a dollar (see graphic).

There are now suggestions that India should agree to an MIP of $4 a bottle, which domestic players believe would result in a flood of imports from the UK and wipe out several homegrown players and Indian-made foreign liquor (IMFL) brands.
“It is going to cause a lot of damage as domestic players will find it tough to compete and foreign players, who have set up bottling units here, will not add fresh capacity and may go to the extent of reducing capacity, which will hit employment,” a source told TOI.
With a 3.3% share, imported products are a small portion of the overall Indian whisky market, but when it comes to the middle and the premium segment – defined as those over Rs 750 a bottle – the share of Scotch is nearly 32% and rising fast. In fact, there has been an over five percentage point increase in the last four years, shows data from IWSR, an international agency tracking the alcohol market (see graphic).
Domestic players have told the government that even without a reduction in import duty, there has been a surge in bottled Scotch in recent years. For instance, during 2022-23, bottled whisky imports more than doubled to $316 million from $152 million. In contrast, during this period, the value of bulk whisky shipments are estimated to have increased by over 40% to around $149 million.
“All the Scotch is coming from the UK, although in several cases, the origin is shown as Singapore and the UAE, given that they are global trans-shipment hubs,” said an industry source. What has further fuelled this is states such as Maharashtra slashing excise duty to 150% from 300% in November 2021, while the levy on domestic produce was kept at 300%.