Enhanced India-UK Free Trade Agreement expected to lower Scotch whisky prices, as per Pernod Ricard India's claims.
In a significant move, Pernod Ricard India has announced that the implementation of the India-UK Free Trade Agreement will result in reduced import duties on Scottish whisky and gin, leading to lower retail prices for premium Scotch whiskies in India. The trade agreement, which will gradually decrease tariffs over the course of a decade, will initially halve the import duty on these spirits from 150% to 75%. By the tenth year, duties will further drop to 40%.
This tariff reduction is expected to translate into more affordable prices for imported whisky and gin, making them more competitive against the current high prices influenced by steep duties. Pernod Ricard India has stated that it will pass these price reductions onto consumers, offering improved access to premium Scotch whiskies and strengthening its market position in India.
The deal is predicted to bring about a £1 billion increase in Scotch whisky exports to India over the next five years, suggesting a promising growth trajectory driven by better price competitiveness and enhanced market access. The reduction in tariffs is poised to create additional opportunities for UK spirits in India's expanding alcoholic beverage market, driving up bilateral trade and generating jobs in the UK whisky industry.
However, retail prices of liquor in India are subject to state-level government policies, which may dampen the extent of price decreases for consumers. Indian-made foreign liquor, typically priced lower than imported spirits, is hence anticipated to remain competitively priced, minimizing the impact of the trade agreement on prices for these products.
While tariff cuts are clear, their overall impact on Indian market prices might be qualified by additional factors such as distribution costs, state taxes, and retail margins. In the long term, by the tenth year, with tariffs at 40%, Scotch whisky and gin will become more affordable, potentially widening the consumer base in India and bolstering stronger market penetration for premium and super-premium segments. The progressive tariff reductions over the decade will likely encourage UK producers to invest more in India, while Indian consumers gain access to a broader range of products at more competitive prices, cementing India as a key export market for Scotch whisky and gin.
In summary, the India-UK Free Trade Agreement will lead to substantial decreases in tariffs on Scotch whisky and gin in India over the next 10 years, resulting in lower retail prices and stronger market growth. Consumers will have increased access to premium UK spirits, expanding UK exports, and fostering competitive dynamics in the Indian alcoholic beverage market, although state-level controls may moderate certain price changes. The agreement is expected to significantly boost Scotch whisky and gin consumption in India over the coming decade.
- The tariff reduction as a result of the India-UK Free Trade Agreement is suspected to make imported Scotch whisky and gin more affordable, creating a competitive edge against the current high prices.
- Pernod Ricard India has declared its intention to pass these price reductions onto consumers, which means improved access to premium Scotch whiskies in the Indian market.
- The deal is projected to result in a £1 billion increase in Scotch whisky exports to India, indicating a positive trend driven by better price competitiveness and enhanced market access.
- Consequently, the progressive tariff reductions over the next decade are expected to encourage UK producers to invest more in India, providing Indian consumers with a broader range of products at more competitive prices.
