India is now the biggest market for Scotch whisky in the world. What gives?
Whisky is on a high in India, a new un-precedented high. Bars across hotels are depleting their premium whisky inventories like never before, and premium banquets, which were used to selling blends are now enjoying global palates that voyage across Scotland, Ireland, Japan and even Taiwan. Home Bars have whiskies that range from traditional “Glens” to new age distilleries. Whisky cocktails are mixology’s favourite toast, using even smokey whiskies, and not just blends.
In India, this new wave is coasting on premiumisation with Scotch whisky leading the pack. Premiumisation informs a consumer trend that prioritises premium products and authentic consumption experiences. Experts attribute this trend toward premiumisation and indulgence to impulsive and aspirational behavior, seeking higher-priced, often more sophisticated products with perceived quality attributes that underline status. In recent years, premiumisation has become a key driver pushing value growth in spirits sales around the world, as consumers opt for increasingly exciting and high-quality experiences and choices to suit their tastes. Spirits producers also attach a high value to the consumers’ experience when tasting premium spirits.
So whether it’s colonial hangover or the new-age salute of a millennial trend, when it comes to the ‘water of life’, clearly our cups runneth over. With India’s love affair with Scotch at an all-time high, the country is now the world’s largest importer of scotch whisky by volume. But the big headline: India’s growth has replaced France as the largest Scotch whisky market by volume. Interestingly, despite a 60 per cent growth, Scotch still comprises only 2 per cent of the Indian whisky market. But foreign brands that have made a dent in this pie include Bowmore, JW Black Label, Chivas and The Glenlivet, which witnessed double digits growth. Even retail has witnessed a massive increase in the sales of all scotch whiskies.
Global exports of Scotch whisky grew to more than £6 billion for the first time in 2022, according to figures released last month by the Scotch Whisky Association (SWA). The value of Scotch Whisky exports was up 37 per cent, to £6.2 billion. The Asia-Pacific region overtook the EU as the industry’s largest regional market, with double-digits growth in Taiwan, Singapore, India and China as post-Covid recovery continued. SWA analysis shows that a UK-India FTA deal that eases the 150 per cent tariff burden on Scotch in India could boost market access for Scotland’s whisky companies, allowing for an additional £1billion of growth over the next five years.
Growth is a double edged sword
The growth which is a direct impact of the duty concessions, is however affecting domestic players in a negative way. The domestic industry is 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), which fields big local players such as 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, the UK is looking forward towards tariff reduction besides exporting barrels, with bottling and packaging in India. Under pricing is another area of concern as Scotch whisky companies in the UK are selling to their Indian subsidiaries at extremely low rates making foreign liquor more attractive.
Despite a threefold increase in imports over the last decade, Scotch whisky still accounts for only 2 per cent of the Indian whisky market which includes finished products as well as the ones bottled in India. India is predominantly a brown spirits market, and has witnessed a growth towards premiumisation in addition to customer loyalty to the category. The high for the industry stems form the fact that it is being driven by a strong demand for high-quality, premium alcoholic beverages.
This has bolstered the growth potential for India’s whisky market, which has seen the emergence of a plethora of Indian Whiskies in the last five years, which are mostly blended with Scotch. New scotch whiskies like Auchentoshan, Bowmore, The Macallan Variants, Glencadam, Tomintoul, Balblair and even Kilchoman are finding a pride of place in Indian Bars. Scotch continues to thrive on provenance, age, legacy and its historical connect with India.
Consumption and possession of premium whisky brands are closely entwined with a luxe lifestyle. And the growing whisky market in India has been driven by the changing lifestyle, rapid urbanisation, and an increase in consumer purchasing power and accessibility of global whisky brands besides Indian ones. New age whiskies like Glenmorangie X are made for mixing. A Bowmore is not just restricted to “gifting a Scotch” but more about enjoying with friends at home. Appreciating whiskies with friends at Bars and pairing with starters is now par for the course. Opening a 21 YO single malt over a weekend is more chic than obsessing over special ocassions to allow the spirit to breathe. Even Clubs such as DLF Camellias are more focussed on building a collection. Aura Bar at The Claridges has ensured that all of their whisky cocktails are designed by a global mixologist. Whisky is soulful, yet sublime. It’s aged, and yet has caught the imagination of Gen Z, re-writing the script for Scotch whisky’s India story.