(MENAFN- Live Mint) India is set to become the world's largest market for scotch whisky in both value and volume terms within the next few years, according to Scotch Whisky Association Chief Executive Mark Kent CMG, who attributes this growth to competitive intensity, a trend towards premiumisation and robust economic expansion in India.

India has already reclaimed its position from France as the world's top Scotch Whisky export market by volume, with 192 million bottles shipped, according to the latest SWA data, though in terms of value, it ranks among the top five.

The United States currently leads by value, however the SWA chief is“optimistic” that the combination of market growth and a more competitive import environment following a Free Trade Agreement between UK and India will place India as the biggest by value as well, PTI reported.

Partnership with Indian single malt makers

The SWA is actively seeking a new era of partnerships with India, not only for export to the UK market but also to explore other global markets together.

Mark Kent highly praised the rise of Indian single malt whisky, noting it's recent success in winning several prestigious international accolades. He plans to speak with the Indian Malt Whiskey Association regarding the partnerships, as both sides share the same views on the importance of quality in manufacturing and working together.

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This collaboration is being viewed as a significant opportunity for both Indian and Scottish industries.“There is an opportunity for Indian companies to boost exports of Indian single malt to the UK and forge partnerships for global markets. So, it really is a moment of opportunity to be seized by both sides,” he told PTI.

However, he noted that the market's success will also depend on certain factors around the world economy. Mark Kent said he is optimistic that India has a“very educated knowledge of scotch and whiskey.”

Impact of the India-UK FTA

The FTA between Indian and UK is poised to be a major catalyst for the projected growth of scotch whisky market. As per the agreement, which is awaiting ratification, India is reducing duty on UK whisky and gin from 150% to 75% and further to 40% in the 10th year of the deal.

Mark Kent, who visited India as part of the delegation of British Prime Minister Keir Starmer in October this year, believes that the FTA will have several win-win outcomes for both the nations.

- Increased variety: A variety of quality Scotch whisky will enter the Indian market, especially from some of the smaller producers from Scotland.

- Boost to IMFL: The import of bulk Scotch will also increase. This is particularly beneficial as the tariff will drop on bulk whiskey, which constitutes 79% of all whiskey that is exported to India, leading to cheaper and more competitive imports for Indian manufacturers to incorporate into Indian Made Foreign Liquor (IMFL).

- Investment: The deal is also expected to bring more investment in both India and in Scotland.

The SWA chief acknowledged that while the reduced external tariff is expected to lower costs for consumers and boost sales, the ultimate impact on retail prices will also depend on individual state regulations and tax frameworks.

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“It will depend on individual states and their own regulation and their own tax framework, and it will depend on individual companies. It's fair to say that you will see a reduction in the cost of the consumers, but that will depend on each individual circumstances, both on the states and on the individual companies,” Mark Kent was quoted as saying by PTI.

On whether the association will talk to some state governments on this aspect, he noted,“The trick is finding the right regulatory framework and tax framework, which enables market pricing, which in turn will bring more investment, more trade, and that in turn will bring more excise revenue to the individual states and we are very happy to work in partnership with Indian associations and the Indian government to find these optimal outcomes.”

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