Why the anticipated India-UK FTA deal will lift brewers’ spirits
The prospect of a UK-India Free Trade Agreement and the associated reduction in duty on imported scotch presents an exciting opportunity for the spirits industry. If the agreement comes to fruition, it could provide a welcome boost to United Spirits and have a positive ripple effect throughout the industry, potentially benefiting both companies and consumers alike.
Amidst the excitement of the ongoing Cricket World Cup, a potential visit by the UK Prime Minister, Rishi Sunak, to India is garnering attention. The primary agenda? Discussing the prospects of a Free Trade Agreement (FTA) that could also boost the spirits industry.
This development has ignited enthusiasm, particularly within the spirits industry, as it could lead to a significant reduction in the duty imposed on imported scotch.
.The rapid growth of the scotch segment has significantly buoyed some players such as United Spirits.
The anticipation is high as Sunak's visit might align with the India vs. England match on October 29.
Hina Nagarajan, the Managing Director of United Spirits, spoke to CNBC-TV18 about the potential impact of a UK-India FTA on the spirits sector.
She said, "The impact could range from 5% to 15% depending on the maximum retail price (MRP) of the spirits." If this possible cut in duty is passed on to buyers, it could be good news for the entire industry. This could mean higher sales volumes.
Scotch whiskey associations told CNBC-TV18 that 219 million bottles were exported to India in 2022 despite an import duty of 150%.
While the UK is pushing for a duty cut, Indian whiskey manufacturers are opposing any such move in order to protect their market share. Earlier this year, India had replaced France as the world's biggest buyer of scotch, and India's whiskey market is expected to cross $22 billion by 2027.
For more details, watch the accompanying video
(Edited by : Shweta Mungre)
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