Nishant Sharma moved to Glasgow from Punjab, India almost 20 years ago, beginning as a dishwasher before establishing Rutland Square, his own spirit company, named after the location of the Indian Consulate in Edinburgh.
The announcement of a trade deal with the UK this week cleared the path of a massive export expansion to his ancestor home in the tea gardens in Assam, where his great grandfather learned to distill spirits with Scottish colonial officers and blend whiskey.
For three years, Sharma has injected Jin with Assam Tea, building a transnational story of the spirits currently selling to Indian consumers through its duty-free retail channel.
India’s previous high tariffs have served as barriers to operations such as Rutland Square. It wants to capitalize on growing demand for Prestige Scotch whiskey and gin amid India’s growing middle class.
India is the world’s largest scotch export market by volume ©Udit Kulshrestha/Bloomberg
“This new trade agreement gives us a gateway to India,” said Sharma, who is aiming to sell £2 million by the end of this year. 60% of those come from overseas. “It creates national revenue and enormous jobs,” he said.
The trade contract cut the tariffs on Scotch imported to India from 150% to 75%, and was reduced to 40% after 10 years. However, the two sides did not include Indian state tariffs in the announcement, which could result in an additional 150% leviation in addition to the federal accusations.
Nevertheless, loosening of trade barriers could potentially increase exports to India by £1 billion over the next five years, according to the Scotch Whiskey Association, the trade organisation.
India is the world’s largest market for Scotch exports, with 192mn bottles exported in 2024, with 13.7%, or 13.7% of all exports. However, it is the fifth largest value, at £248 million, a quarter of the value of exports to the US.
The deal comes at a convenient time for an industry facing a cyclical slump as input costs skyrocket and leaving stacked warehouses and cash-bound distillers looking to limit production while consumers trade down to cheaper brands.
Diageo CEO Debra Crew welcomed the UK-India trade agreement ©Tayfun Salci/Zuma Press Wire/Shutterstock
Diajo, the world’s largest Scotch producer, welcomed the announcement of the deal. According to analysts at Bernstein, India accounted for 6% of FTSE 100 Group’s net sales in 2024, or USD 1.3 billion in annual net sales.
“Today’s agreement is a huge achievement,” said Debra, the crew of Diageo’s chief executive, adding that India is “the largest and most exciting whiskey market in the world.”
“It’s a transformation for Scotch and Scotland, and it will drive employment and investment in both India and the UK,” she said.
Diageo’s high-end brands such as Johnnie Walker bottled in Scotland account for around 24% of the group’s sales in India. According to Bernstein, scotch is imported in bulk and bottled in India accounts for an additional 6%. The rest of that sale consists of local whiskey brands that are not affected by customs duties.
Analysts at Goldman Sachs estimated that Diageo and Pernod Ricardo’s earnings per share will be down by digits due to tariff cuts. “This is welcome news given the current weaknesses of spirits around the world, but we continue to be cautious about the sector due to insufficient US demand,” they said.
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The partial UK-US trade agreement announced this week maintains a 10% tariff on most UK goods entering the US, with only US and steel exports gaining US cuts.
“The welcome advancements in other sectors are a clear indication that the intensive efforts by the UK government are paying off. We continue to support this measured and practical approach in the coming weeks so that Scotch whiskey can return to the Zero-Feel Customs Agreement in the US whiskey industry as quickly as possible,” the Scotch Whiskey Association said.
As far as the UK contracts with India are concerned, Jason Holway, a senior consultant at data provider IWSR, estimates that the easing of tariffs will lead to a 10% drop in price for Indian consumers of British whiskey.
“This should not be sniffed, it’s not a game changer. It’s important to emphasize that savings are not universal and may not be passed on to consumers, at least in the short term,” he said.
Holway added that brand owners are already charging at low prices to compensate for their high obligations. “The Indian state government is reluctant to allow prices to be reduced as tax revenues will be reduced,” he said.
Jeffreys drink analysts said the deal would help absorb the excess Scotch stock.
Currently, only the biggest players such as Diageo and Pernod, who have a 49% and 30% share of the Scotch market, were able to pay high costs to India, said Jeffries analyst Ed Mandy. As taxes drop, smaller and medium-sized brands can begin exporting.
“This helps to absorb excess inventory in the market and partially alleviate concerns at Whiskey Lake. This risks putting downward pressure on scotch pricing,” Mundy says.
IWSR’s Holway said that Bulkscotch’s world’s largest client, exporters to India, are “more likely to drive more expensive bottle scotch that can bring long-term benefits, rather than focusing on low margins, short-term profits.”
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Hoolite, the Holyrood distillery in Edinburgh, had already planned to launch a whiskey brand in India. “Now we have low landing costs, competitive and we can spend it on building brands within the market,” he said.
Raasay Distillery Island off Sky has already set up imports to India and “enter the market in a more meaningful way,” said Managing Director William Dobbie. Within five years, India was able to infiltrate the company’s top five markets. Currently in the UK, France, the US, China and Germany.
Smaller distilleries need to build distribution channels, expand marketing spending and think about protecting intellectual property rights, according to Brian Moore of law firm Dentons.
“There’s a lot to do, but these are champagne issues,” he said. “This is an opportunity the industry has been seeking for a long time.”
Data visualization with Janina Conboye in London
