Duty concessions for American whiskey and wine under the proposed India–US trade arrangement are unlikely to significantly disrupt domestic alcohol makers, according to industry executives and market data cited in a report by Times of India’s Sidhartha.
One key reason is the expectation that any tariff relief would be accompanied by a minimum import price requirement–similar to provisions included in earlier trade agreements with Australia, Europe and the United Kingdom. In addition, current sales volumes of American spirits in India remain extremely small.
With total sales of about 2,29,000 nine-litre cases, American whiskey accounts for less than 0.1% of India’s overall whiskey market, which continues to be dominated by domestic producers. By comparison, Scotch commands a share of over 3%, while Irish whiskey holds under 0.2%.
Industry representatives argue that consumer taste profiles, rather than pricing alone, limit the appeal of American whiskey.
“Most Bourbons and Tennessee whiskies have distinct darkish colour and stronger flavours, which like single malt whiskies, appeal to a more discerning palette and less so to the majority of premium whiskey consumers. Pricing is not the main barrier to consumer adoption, as has been evidenced by the very modest performance of bottled in India Jim Beam that retails at a very affordable price below locally bottled Scotch whiskey. So, duty reduction on Bourbon will not make any big impact on the premium whiskey market,” Brewers Association of India director general Vinod Giri said.
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The industry is still awaiting finer details of the bilateral trade pact, even as government officials have indicated that domestic interests will be protected.
“CIABC believes that the bilateral trade deal will be equitable and mutually beneficial for both countries. CIABC is not against reduction in import duty, but wants it in a phased manner,” said Anant S Iyer, director general of the Confederation of Indian Alcoholic Beverages Companies.In the wine segment too, imported labels occupy a narrow slice of the broader alcohol market. Wine accounts for less than 0.5% of total alcohol consumption in India, with Australian varieties currently holding the largest share among imports.
“Success in the Indian wine market, especially imported wines, is driven not just by provenance, but by ability to distribute effectively,” Giri added.
Taken together, the limited scale of imports, evolving consumer preferences and likely policy safeguards suggest that tariff relief for US spirits may do little to alter the balance of India’s vast and domestically led alcohol market.
(With inputs from ToI)
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