Reduced Tariffs on British Whiskey Imports Spur Indian Players to Ramp Up, Says DeVANS

This trend is fueled by the quality of the Indian single malts as well as the wide array of brands introduced into the market by the manufacturers across all price segments. Indian single malts are selling in price bands ranging from ₹2,000 to ₹10,000 and are being lapped up by the consumers. They are not just competing with imported single malts but are selling at rates even much higher than them.

Urban millennials and younger consumers under 35 are emerging as premium spirit purchasers with a penchant for genuine quality. The quality of the Scotch whiskies has been hyped over the ages, as there was no visible alternative available.

It was also believed that the weather in Scotland had a big role to play in the quality of the product, and nobody could produce better whiskies. This has now changed. It is now settled that spirits matured in warm and tropical climates result in excellent products though the maturation losses are hugged. However, the huge losses are offset by the speedier maturation resulting in an excellent whisky in a much lesser time.

India's tropical climate allows for more rapid maturation, creating distinct flavor profiles that resonate both domestically and internationally. Increased retail penetration, growth in e-commerce, and digital influencer campaigns have further increased access and awareness, driving this collective market shift in turn.

Urban millennials, aged between 25-35 years, are the pace-setters, accounting for a significant portion of single malt premium sales in 2023. The increasing disposable incomes and international exposure of this segment make single malts lifestyle and status products. Tier-2 and tier-3 city-based high-income consumers drive greater volume growth, reaping the benefits of increased incomes and access to digital media for premium brands.

Also, many new drinkers and first-time premium spirit consumers are switching from beer and ready-to-drink beverages to single malts due to the unique nature of the product, which is very distinct from blended whiskies. This democratisation is empowered by wider availability at retail, online platforms, and focused marketing making whisky more accessible, enabling Indian single malts to shift from niche luxury to mass aspirational products in urban and emerging markets.

The 75% growth in the single malts category in 2023 compared to growth for the broader segment demonstrates consumer preference for craft, quality, and uniqueness. Increased incomes, more consumer awareness, and an expanding tasting culture—particularly among millennials—are primary drivers. An increase in distribution networks and experiential marketing is boosting access in metros and tier-2 cities.

Single malts are expected to increase their share of the premium whisky market significantly in the coming years, reflecting growing consumer preference for craft and quality spirits which represents a structural market shift towards sophistication and lifestyle investment in India's premium spirits market.

Producing single malts in India faces unique cost challenges despite faster maturation due to the tropical climate. High temperatures and humidity lead to an annual “angel’s share” annual evaporation loss of 12-15% compared to just about 2% in Scotland thereby increasing costs. Sourcing high-quality barley and other inputs specific to Indian conditions increases expense.

Add to this, the high cost of investment in barrels and the liquid at interest rates ranging from 10% to 15% compared to very low rates in the developed countries. Regulatory complexity and high state excise duties—sometimes well over 100%—add logistical burdens and price volatility.

Despite these challenges, Indian distillers invest in innovation, including climate-adapted cask management. These factors make Indian single malt production more capital-intensive but also contribute to distinctive flavor profiles that have gained international acclaim.

Growth in Indian single malts' exports and availability in more than 30 countries indicate increasing overseas interest spurred by distinct flavor profiles and favorable prices. The tropical climate speeds up maturation, resulting in richer, fruitier, and fuller tastes that excite connoisseurs interested in exploring new horizons beyond Scotch and Japanese whiskies.

Stringent production protocols and several global awards have increased credibility, drawing whisky aficionados and collectors worldwide. The global shift towards craft and artisanal spirits is in India’s single malts’ favor.

Increased distribution and focused promotion within Europe and Japan raise visibility and accessibility. Indian whiskies present a strong value proposition—good quality at a reasonable price—carving out a niche despite being relatively late entrants into the worldwide market.

With the tariffs on British imports into India reduced from 150% to 100%, and possibly to 75% in future, Indian producers of whisky are investing heavily in capacity expansion and improving quality, branding and distribution to weather greater Scotch competition.

Investment in distillation and maturation technologies seeks to improve product standards while highlighting unique climate-influenced flavor profiles as points of differentiation. Brand development involves storytelling about India's traditional craftsmanship to foster consumer loyalty.

Penetration into tier-3 and tier-2 markets, combined with online marketing among young consumers, shields market share. These strategic moves place Indian single malts on the path to growth despite tariff-induced pricing challenges.

Price sensitivity is higher in tier-2 and tier-3 cities that account for almost half of India's population. Fragmented regulatory environments with differential state excise duties result in uneven market access. Ironically, many state governments levy lower excise duties on imported liquor thereby reducing their costs to the consumers which can result in huge disruptions for the domestic manufacturers.

India is probably the only country in the world which provides such a facility to imported liquor despite manufacturing quality products within the country. Supply chain limitations such as raw material availability and shortages can limit on-time expansion. Overcoming these challenges through regulatory reforms, consumer education, strategic pricing, and infrastructure growth will be essential to maintaining India's premiumization drive.

The absence of universal definitions or legal standards for single malts in India is a contrast to Scotland's strict Scotch Whisky Association (SWA) system, which ensures quality and authenticity. Having precise, standardised production parameters is essential for Indian single malts in order to acquire global legitimacy.

Countries with strict regulations tend to command higher consumer trust and premium pricing; Scotch whisky holds over 50% of the global premium whisky market aided by its protected designation of origin. With Indian single malts exporting to 30+ countries and witnessing export growth, standardised definitions would safeguard brand reputation, reduce counterfeiting, and facilitate smoother international trade.

Domestically, this would foster consumer confidence and understanding. With the premium whisky market expected to increase at a CAGR of 7.6% by 2028, industry associations and regulators need to come together to standardize according to international standards to make it more competitive and credible.