he India-UK trade deal lowered tariffs, but Indian liquor brands say they’re still denied fair access to British shelves. Here’s what the data and industry insiders reveal.
When India and the UK signed a historic Free Trade Agreement (FTA) in July 2025, the headlines focused on billions in potential trade gains and duty reliefs. But within the celebration came discontent from a quieter but fast-growing segment of Indian enterprise: its liquor industry.
Indian spirits makers, especially in the premium whisky and rum segments, now say the agreement unfairly favors British brands and does little to remove the entrenched trade barriers that keep Indian products from entering Western markets on equal footing. The dispute opens a deeper conversation on how trade is still shaped by colonial-era assumptions, climate-blind regulations, and asymmetric definitions of quality.
The Deal That Sparked It
Signed during Prime Minister Modi’s UK visit on July 24, 2025, the India–UK FTA reduced tariffs on several British imports. Most notably, it slashed India’s 150% duty on Scotch whisky to 75% initially, with a phased reduction to 40% over ten years. British cars and electronics also benefited, while nearly 99% of Indian exports got duty-free access to the UK.
But for Indian spirits producers, the concern wasn’t about duties. It was about standards.
Aged to Discriminate?
Under UK regulations, for a spirit to be called “whisky,” it must be aged for at least three years in oak barrels. That works for Scotland. But in India’s hot and humid climate, alcohol matures faster. In fact, a two-year-old Indian whisky often matches the flavor profile and chemical complexity of a five-year-old Scotch.
However, because Indian producers lose up to 12–15% of the spirit each year to evaporation (“the angel’s share”), stretching maturation to three years can result in massive product loss. Worse, even after complying, UK and EU labeling laws prohibit Indian brands from using the word “whisky” on bottles sold in Europe if they don’t meet the region’s interpretation of age and process.
“It’s a clear non-tariff barrier,” said Vinod Giri, Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC). “We are opening our markets to their spirits, but we still can’t sell ours as whisky in their stores. This isn’t free trade. It’s selective access.”
Branding Denied
Indian brands like Radico Khaitan, Amrut Distilleries, and John Distilleries, which have won global awards for quality and innovation, are often forced to label their products as “Indian-made spirits” instead of whisky.
This has commercial consequences:
- Shelf space shrinks in retail outlets that organize by spirit type.
- Price perception suffers; a bottle labeled “whisky” may retail for £45, while “Indian spirit” gets placed beside lesser-known liqueurs at £20.
- Marketing is limited; UK regulations restrict use of certain terminology in promotional materials if they don’t align with EU/UK definitions.
“It’s like telling French wine producers they can’t use the word ‘wine’ outside France because the grapes grew faster,” quipped Anand Virmani, founder of Goa-based NAO Spirits.
Unequal Gains from Free Trade
The FTA does deliver access to UK shelves for Indian products—but it doesn’t adjust the regulatory playing field. And while Scotch gets a smoother path into Indian markets (at lower prices), Indian producers still need to clear complex certifications, invest in local warehousing, and navigate legacy rules abroad.
The CIABC estimates that British spirits exports to India could grow 60–80% by 2027, while Indian alcohol exports to the UK may rise less than 10% unless labeling and classification issues are resolved.
To prevent market flooding by discounted Scotch, CIABC has proposed a Minimum Import Price (MIP) and anti-dumping mechanisms for bottled-in-origin spirits. There’s also a push for Geographical Indication (GI) checks at Indian ports to preserve brand identity and local craftsmanship.
What the Data Says
- India is the largest whisky market in the world by volume, with over 250 million cases sold annually.
- Only 1.6 million cases of Scotch were sold in India in 2024—25—but that number is expected to double post-FTA.
- Indian alcohol exports (all categories) totaled $322 million in 2024. The goal: $1 billion annually by 2030.
Without reforming access rules abroad, that target may remain elusive.
Bigger Than Booze: Why It Matters
The liquor labeling controversy isn’t just about industry politics. It’s a case study in how global trade continues to reflect outdated notions of quality, identity, and process. For Indian entrepreneurs—not just in beverages but across food, fashion, and wellness sectors—the FTA highlights the need to look beyond tariffs and examine how language, legacy laws, and regional preferences shape perception and profits.
Trade justice today means more than market entry. It means redefining what qualifies as world-class.
