Whisky tariffs to be halved by ‘fantastic’ India trade deal

Scotland’s economy is set for a £190m boost from a landmark trade deal with India.

Prime Minister Sir Keir Starmer will welcome his Indian counterpart Narendra Modi on Thursday to sign the deal, which will see tariffs on whisky cut from 150% to 75%, and potentially dropping to 40% in the next decade.

Tariffs on soft drinks will also be phased out, falling from 33% to 0%.

India is already a key market for Scotland, with 457 Scottish businesses exporting goods worth £610m there in 2024. The new deal is expected to reduce red tape, ease customs rules, and lower trade barriers, opening doors for even greater exports.

Ian Murray, the secretary of state for Scotland, welcomed the deal, calling it “fantastic news” for Scotland’s economy and global trade profile.

He said: “From food, drink and textiles production, to clean energy, advanced manufacturing, life sciences and financial services, Scotland has so much to offer India.

“It’s fantastic news in particular for the world-famous whisky industry, with Indian import tariffs slashed on Scotch having the potential to be transformational for the industry. It’s also good news for our other national drink, with tariffs on soft drinks cut.

“As the UK Government delivers our Plan for Change, we are also bringing inward investment to Scotland to create jobs, boost economic growth and improve living standards right across the UK.”

Jonathan Reynolds, the business and trade secretary, said the benefits would be felt across communities, from higher wages to cheaper goods on the shelves.

He said: “The millions brought to Scotland each year from the deal we’ve signed with India today will be keenly felt across local communities, whether that’s higher wages for workers, more choice for shoppers, or increased overseas sales for businesses.

Scotch Whisky Association chief executive Mark Kent said the industry had “long championed” a deal with India, adding: “The signing of the FTA is a historic moment and is an important milestone to reducing tariffs on Scotch whisky in a growing market.

“This will contribute to the Government’s growth objective, by laying the foundations for further investment and jobs.”

Chivas Brothers CEO Jean-Etienne Gourgues described the agreement as a “game changer.”

“India is the largest whisky market in the world,” he said. “Greater access will support long-term growth and investment in our distilleries and bottling plant in Scotland.”

The trade deal also includes commitments on intellectual property, offering protection for Scottish life sciences and health tech firms exporting to India.

UK wages are expected to rise by £2.2bn a year as a result of the deal, with potential savings for Scottish manufacturers importing components and materials.

The Scottish Government welcomed the deal and said “Scotland is open for business”.

Business minister Richard Lochhead said: “The signing of this deal is welcome. India is an increasingly attractive market for Scottish firms given its fast-growing economy, which offers positive trade and investment opportunities.

“The Scottish Government will now consider the full details of the finalised agreement, paying close attention to the implications for Scottish businesses.

“Alongside industry, we have repeatedly encouraged the UK Government to ensure Indian tariffs on Scotch whisky are reduced.

“The opportunity is vast, which is why these new measures must be implemented swiftly. At a time of increased global economic insecurity, it’s more important than ever that we champion Scottish products to drive economic growth and support jobs.

“The Scottish Government’s position is clear that Scotland is open for business and we continue to work alongside business to maximise trading opportunities.”