India could become world's largest Scotch whisky market as UK trade deal halves duties
GS3Economy · S&T · Environment · Security· External sector, trade & FDI· Prelims + Mains·
Trade Liberalization and its impact on domestic industries: a GS3 Economy and Ethics case study.
Why in news
The Scotch Whisky Association reported that India could become the world's largest Scotch whisky market by value following the India-UK free trade agreement halving customs duties.
Background
The India-UK free trade agreement became effective on July 15, reducing customs duties on Scotch whisky from 150 per cent to 75 per cent. Exports reached 286 million British Pound Sterling in 2025.
Facts for Prelims
- FactScotch whisky customs duties were halved from 150 per cent to 75 per cent under the India-UK free trade agreement.
- FactExports of Scotch whisky to India reached 286 million British Pound Sterling in 2025.
- BodyThe Scotch Whisky Association and the Confederation of Indian Alcoholic Beverage Companies are key industry bodies mentioned.
Prelims practice question
Under the India-UK free trade agreement, what is the reduced customs duty on Scotch whisky?
- (a)25 per cent
- (b)75 per cent
- (c)50 per cent
- (d)100 per cent
Show answer
Answer: (b) 75 per cent — The India-UK free trade agreement reduced customs duties on Scotch whisky from 150 per cent to 75 per cent.
For Mains
Q. Discuss the implications of preferential trade agreements on domestic industries and the necessity of tax parity for local manufacturers in India.
Dimensions to cover in your answer
- Market distortion: Potential for imported spirits to undercut domestic brands due to preferential duty structures
- Fiscal trade-off: Balancing the benefits of bilateral trade expansion against the erosion of domestic manufacturing competitiveness
Keywords: Trade Liberalization · Tax Parity · Market Distortion · Preferential Trade · Domestic Manufacturing
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.