Cheers! Scotch whisky prices set to drop after India-UK trade deal
Tariffs on Scotch whisky exports to India will be cut in half under the terms of a landmark Free Trade Agreement (FTA) between the United Kingdom and India, which is set to be formally signed in London later this month, UK government sources have confirmed.
Under the deal, duties on Scotch will fall from 150 per cent to 75 per cent immediately, with a further reduction to 40 per cent over the next decade. The Scotch Whisky Association (SWA) described the agreement as “transformational” and forecast an export boost of £1 billion (₹11,501.1 crore) over five years, making India one of the industry’s most important growth markets.
“The UK‑India Free Trade Agreement is a once-in-a-generation deal and a landmark moment for Scotch Whisky exports to the world’s largest whisky market,” said Mark Kent, Chief Executive of the Scotch Whisky Association.
“It shows that the UK government is making significant progress towards achieving its growth mission, and the Scotch whisky industry looks forward to working with the UK and Indian governments in the months ahead to implement the deal, which would be a big boost to two major global economies during turbulent times.”
The tariff reductions on whisky were part of a broader breakthrough reached during final negotiations held in New Delhi between April 22 and 26, where UK officials accepted longstanding Indian demands on labour mobility and social security exemptions for professionals on temporary assignments.
The compromise includes a youth mobility scheme allowing 3,000 young professionals from each country to live and work abroad for up to two years, as well as a provision exempting seconded Indian workers from paying into the UK’s National Insurance system for three years.
The agreement — announced in principle on May 6 — marks one of the most comprehensive trade deals signed by either country. It will eliminate tariffs on 99 per cent of Indian exports to the UK, including textiles, apparel, pharmaceuticals, and gems. In return, 90 per cent of UK exports to India will see phased tariff reductions over a 10-year period, benefiting automobiles, medical devices, aerospace components, and legal services sectors.
“There is no situation where I would ever tolerate British workers being undercut through any trade agreement we would sign. That is not part of this deal,” said Jonathan Reynolds, UK Secretary of State for Business and Trade, in response to domestic criticism of the labour mobility clauses. “This is a reciprocal agreement in line with more than 50 countries. No one is being undercut.”
Despite support from business groups and both governments, the deal has faced criticism within the UK, particularly over the tax exemptions for seconded Indian workers. “This is two-tier taxes from two-tier Keir,” said Kemi Badenoch, Leader of the Opposition and head of the Conservative Party, referring to Labour Prime Minister Keir Starmer and the National Insurance exemption provision.
“It basically encourages workers from India but does not provide the same benefit to UK citizens.Indian workers will pay 20 per cent less tax than Brits doing the same jobs. That’s not a trade deal — that’s betrayal,” said Nigel Farage, leader of Reform UK.
A UK Treasury analysis leaked to the British media estimates the tax break could cost the UK up to £200 million annually in lost revenue. The deal is expected to double annual bilateral trade to $100 billion by 2030, and UK officials estimate it could add £4.8 billion to GDP and £2.2 billion in wage growth over the next decade.
Beyond economic benefits, the FTA is being billed as a post-colonial reset between two democracies with shared interests in the Indo-Pacific, digital regulation, and strategic supply chains.
Prime Minister Narendra Modi is expected to visit the UK later this month to attend the formal signing ceremony. While the exact details of his itinerary have not been confirmed, sources hint that he may be hosted at Buckingham Palace and could address Parliament — though neither event has been officially announced.
This will not be Modi’s first visit to the UK. He previously visited in 2015 and again in 2018, including appearances at Wembley Stadium and meetings with British prime ministers. His upcoming trip, however, is being closely watched as a potential capstone to years of trade negotiations and a signal of reset in India–UK relations.
The formal ratification of the FTA will follow later, with side agreements on investment protection and carbon-related trade expected to be finalised by the end of the year.
India