India`s love affair with Scotch is growing & does not see any signs of abating. India is now the largest importer of scotch whisky by volume. The big headliner within these figures is India’s growth, replacing France as the largest Scotch Whisky market by volume. Interestingly despite 60% growth, Scotch still only comprises 2% of the Indian whisky market.
Brands including Bowmore, JW Black Label, Chivas and The Glenlivet witnessed double digit growth. Even retail, witnessed a massive increase in the sales of all scotch whiskies.
Global exports of Scotch Whisky grew to more than £6bn for the first time in 2022 according to figures releases this week by the Scotch Whisky Association (SWA). The value of Scotch Whisky exports was up 37% by value, to £6.2bn. The Asia-Pacific region overtook the EU as the industry’s largest regional market, with double-digit growth in Taiwan, Singapore, India and China as the post-Covid recovery continued. SWA analysis shows that a UK-India FTA deal which eases the 150% tariff burden on Scotch Whisky in India could boost market access for Scotland’s whisky companies, allowing for an additional £1bn of growth over the next five years. In North America, the United States returned to its position as the only market with exports valued over £1bn, following the impacts of tariffs on Single Malt Scotch. Both Mexico and Canada also saw growth, underlining the importance of securing further market access wins through the renegotiation of the UK’s Free Trade Agreements with both countries.
The growth which is a direct impact of the duty concessions, is however affecting the domestic players in a negative way. The domestic industry players are deeply concerned about the percentage of imports even without the FTA in place which has been raised by CIABC (The Confederation of Indian Alcohol Beverage Companies) having big players like Amrut Distilleries, Radico Khaitan, Sula Vineyards as members of the Association. Currently, besides Scotch Whisky, Australian Wines are enjoying duty cuts in Delhi under a bilateral trade agreement. On the other hand, UK is looking forward towards tariff reduction besides exporting barrels with bottling and packaging happening in India.
Despite a threefold increase in imports over the last decade, Scotch Whisky still accounts for 2% of the Indian whisky market which includes finished products as well as the ones bottled in India. Alcohol accounts for an increasing share of revenue in states’ taxes in form of the excise duty which is taking care of states’ expenditures like social service. A state-wise comparison indicates that large states like Karnataka, Uttar Pradesh, Punjab & West Bengal rely more on excise duty with alcohol contributing over 20% of their own tax revenue. As per RBI, in less than 10 years, there has been an increase of almost 3% in revenue from excise duty. The CAGR of Excise Duty from Alcohol has been higher than all other sources of revenue. However, the same is not derivative of increased consumption as taxes were increased which are also to deter consumption.
India predominantly being a brown spirits market has seen a growth towards premiumisation besides the customers staying loyal to the category. The high for the industry is that it is being driven by a strong demand for high-quality, premium alcoholic beverages. India’s whisky market with immense growth potential saw the emergence of a plethora of Indian Whiskies in the last five years which are mostly Scotch blended. Consumption and possession of premium whiskey brands are considered mark of maintaining a high lifestyle.
India is the world’s largest whisky consuming nation. The whisky market in India is growing due to the changing lifestyle, rapid urbanization of population, an increase in consumer purchasing power and accessibility of global whisky brands besides Indian ones.