The Scotch Whisky industry has welcomed a “transformational” trade deal between the UK and India that will see Indian tariffs on whisky and gin halved from 150% to 75% before reducing to 40% by year 10 of the deal.
Scotch Whisky is the UK’s leading food and drink export.
Scotch Whisky Association CEO Mark Kent said: “The UK-India free trade agreement is a once in a generation deal and a landmark moment for Scotch Whisky exports to the world’s largest whisky market.
“It shows that the UK government is making significant progress towards achieving its growth mission, and the Scotch Whisky industry looks forward to working with the UK and Indian governments in the months ahead to implement the deal, which would be a big boost to two major global economies during turbulent times.
“The reduction of the current 150% tariff on Scotch Whisky will be transformational for the industry, and has the potential to increase Scotch Whisky exports to India by £1bn over the next 5 years, creating 1,200 jobs across the UK.
“It will also give discerning consumers in India far greater choice of brands, as more SME Scotch Whisky producers have the opportunity to enter the market.”
In 2024, Scotch Whisky exports were worth £5.4 billion. In 2023, Scotch Whisky accounted for 74% of Scottish food and drink exports and 22% of all UK food and drink exports
More than 41,000 people are employed in the Scotch Whisky industry in Scotland and over 25,000 more jobs across the UK are supported by the industry
The governments of the UK and India said on Tuesday they agreed a landmark trade deal.
The UK government said Indian tariffs will be slashed, locking in reductions on 90% of tariff lines “with 85% of these becoming fully tariff-free within a decade.”
Whisky and gin tariffs will be halved from 150% to 75% before reducing to 40% by year ten of the deal, while automotive tariffs will go from over 100% to 10% under a quota.
“Other goods with reduced tariffs, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate, and biscuits,” said the UK government.
“British shoppers could see cheaper prices and more choice on products including clothes, footwear, and food products including frozen prawns as UK liberalises tariffs.”
The deal is expected to increase bilateral trade by £25.5 billion, UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run.
UK Business and Trade Secretary Jonathan Reynolds and Indian Commerce Minister Piyush Goyal held final talks in London last week after relaunching negotiations only two months ago.
UK Prime Minister Keir Starmer said: “We are now in a new era for trade and the economy. That means going further and faster to strengthen the UK’s economy, putting more money in working people’s pockets.
“Through this government’s stable and pragmatic leadership, the UK has become an attractive place to do business. Today we have agreed a landmark deal with India – one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business.
“Strengthening our alliances and reducing trade barriers with economies around the world is part of our Plan for Change to deliver a stronger and more secure economy here at home.”
UK Trade Secretary Jonathan Reynolds said: “This government’s number one mission is growing the economy as part of our Plan for Change so we can put more money in people’s pockets.
“By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North East to whisky distilleries in Scotland.
“In times of global uncertainty, a pragmatic approach to global trade that provides businesses and consumers with stability is more important than ever.”