India and UK Ink Landmark Free Trade Agreement: A Win for Indian Consumers and a Strong Signal to the US
Ranjan 24July2025 Read Time 3 Min's
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| India and UK Ink Landmark Free Trade Agreement- British Imoprted Scotch Whisky likely to be cheaper |
In a
significant diplomatic and economic development, Prime Minister Narendra Modi
today officially signed a comprehensive Free Trade Agreement (FTA) with the
United Kingdom during his ongoing official tour.
This landmark agreement, reached after extensive negotiations, promises to usher in a new era of enhanced trade
between the two nations, with immediate benefits for Indian consumers,particularly those with a taste for British spirits.
The signing of this FTA is seen by many as a powerful message on the global stage, especially to the United States.
During his presidency, Donald Trump had reportedly pressed India hard for a similar trade agreement, but New Delhi had,until now, maintained its strategic autonomy, not yielding to the pressure.
The successful conclusion of the India-UK FTA underscores India's measured approach to international trade, prioritizing deals that align with its long-term national interests.
Cheers for Indian Liquor Enthusiasts
One of the most immediate and tangible impacts of this agreement will be felt by liquor enthusiasts across India.The FTA is set to significantly reduce import duties on UK-produced alcoholic beverages, making popular British spirits notably cheaper.
Currently, India primarily imports Scotch whisky and gin from the UK, with Scotch whisky enjoying immense popularity and seeing a steady rise in imports over recent years.
Iconic brands like Laphroaig and Sipsmith are among the Scotch whiskies favored by Indian consumers, while London Gin also holds a strong position.
Under the new agreement, the import duty on UK whisky will be slashed dramatically.
Initially, the duty will fall from a steep 150% to 75%.
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| India and UK Ink Landmark Free Trade Agreement- Imported London Gin To Get Cheaper |
This reduction is not a one-time affair; the agreement stipulates a further progressive reduction, bringing the duty down to just 40% by the tenth year after the deal's implementation.
This phased reduction is expected to gradually make British whiskies much more affordable and accessible to a wider segment of the Indian market.
Expected Outcomes and Industry Resilience
The anticipated consequence of this duty reduction is a substantial increase in the volume of Scotch whisky imported into India.For consumers, this translates to greater choice and more competitive pricing for their favorite spirits.
While some Indian domestic liquor manufacturers have expressed concerns about increased competition, particularly from "Bottled-in-Origin" Scotch, industry experts largely believe that the overall impact on the robust Indian liquor industry will be manageable.
India's liquor market is the third-largest globally, a testament to its scale and resilience.
The reduction in import duties on bulk Scotch, often used by Indian Made Foreign Liquor IMFL companies for blending, could even lead to reduced costs for these domestic producers, potentially improving their profit margins.
While some believe that a dramatic price drop for consumers might be limited due to state-level taxes on alcohol, the agreement is widely seen as a "win-win" that will boost the premium spirits market and facilitate greater cross-border collaboration in the sector.
Beyond Liquor: A Broader Trade Horizon
While the impact on the liquor industry is a prominent highlight, the India-UK FTA is a comprehensive agreement with far-reaching implications.It aims to eliminate or significantly reduce tariffs on a wide array of goods and services, with the ambitious goal of doubling bilateral trade to $120 billion by 2030. Indian exports, particularly in labor-intensive sectors like textiles, leather, footwear, and marine products, are expected to gain significant duty-free access to the UK market. Similarly, British exports beyond spirits, including automobiles, cosmetics,and medical equipment, will see reduced tariffs, making them more competitive in India.
The signing of this FTA signifies a deepening of economic ties between India and the UK, demonstrating a shared commitment to fostering growth, innovation, and strategic partnerships on a global scale.
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