Diageo to cut Scotch prices in India as UK FTA halves import duties

Duties on UK-made whisky and gin will drop from 150% to 75%, and then to 40% over 10 years under India-UK Free Trade Agreement; Diageo to pass on savings

Global spirits major Diageo Plc is set to reduce the prices of its Scotch whisky brands in India following the recently signed India–UK Free Trade Agreement (FTA), which slashes import duties on UK-made spirits, The Economic Times reported.

 

Under the FTA, customs duties on whisky and gin made in the UK will fall from 150% to 75% initially, and gradually drop to 40% over a 10-year period.

 

For Diageo, which follows a July–June financial year, the price cut will likely begin with high single-digit percentage reductions, with the company confirming that it will fully pass on the duty benefits to consumers. 

 

 

Whiskey prices may drop to ₹3,500 per bottle

India is Diageo’s largest market by volume and second-largest by value. Currently, Scotch whisky accounts for just 4 per cent of total whisky consumption in India due to its high price point. With the duty cut, Diageo expects greater access and demand.

 

A bottle that currently retails for ₹5,000 could fall to ₹3,500–₹4,000, depending on state taxes and distributor margins.

 

The company owns global brands including Johnnie Walker, Tanqueray, and Smirnoff.

 

Boutique brands may benefit, but state taxes still a barrier

The lower duties may also pave the way for smaller, boutique Scotch labels to enter the Indian market—previously priced out by high import duties.

 

However, state taxes, registration costs, and licensing requirements could slow the price cuts from reaching end consumers. Liquor companies in India face:

• Separate label registrations in each state
• Annual licence fees
• Distributor margin variations
• Resistance from states concerned about tax revenue loss

Some companies are already invoicing products at less-than-optimal margins, and there are concerns about minimum import pricing and predatory pricing from new entrants.

 

India imported 192 million bottles of Scotch in 2024

Despite regulatory hurdles, the India–UK FTA is being seen as a breakthrough for global spirits makers.

 

India became the top global market for Scotch whisky by volume in 2024, importing 192 million bottles, up from 167 million in 2023 — surpassing France.

 

While the market for imported single malts has seen a slight dip — partly due to growing consumer interest in Indian malts — the long-term outlook remains robust, especially for mid-tier imported labels that could benefit from the new pricing environment.