The recent signing of the UK-India Free Trade Agreement has been hailed as a pivotal moment for the Scotch whisky industry, amidst a backdrop of ongoing challenges, particularly concerning US tariffs. Mark Kent, Chief Executive of the Scotch Whisky Association, described the deal as a “once in a generation deal and a landmark moment,” with the potential to boost Scotch exports to India by £1 billion over the next five years and create an estimated 1,200 new jobs across the UK. This enthusiasm from the industry comes at a time when distillers have reported declining sales in significant markets like the US and China, driven by geopolitical uncertainties and economic pressures.

However, experts urge caution regarding the anticipated benefits. While the deal promises a reduction in India’s notoriously high import tariff on Scotch whisky—from 150% to 75% initially and further down to 40% over the next decade—the impact on the Indian market may remain limited. Currently, Scotch whisky claims only 2.5% of India’s whisky market, suggesting that while the deal is a step in the right direction, it may disproportionately favour larger producers who are better positioned to navigate export landscapes compared to their smaller counterparts.

The phased tariff cuts aim to make Scotch whisky more affordable for Indian consumers, potentially reducing the price of a bottle from approximately ₹5,000 down to between ₹3,500 and ₹4,000. In addition to making Scotch more accessible, the agreement intends to invite UK expertise in areas such as spirit production and marketing into India, enhancing both production quality and consumer awareness. Moreover, the anticipated liberalisation of duties is expected to augment government revenue and tackle counterfeit products in the market.

Despite the positive outlook from industry leaders, some analysts have expressed scepticism. They point out that the gradual nature of the tariff reductions is designed specifically to protect domestic producers, suggesting the anticipated surge in Scotch sales might not materialise as rapidly as some hope. Challenges remain not only with regard to domestic competition but also from unresolved issues within the agreement itself, which has led to critiques that elements may favour Indian interests at the expense of the UK.

In parallel developments, the Glasgow hospitality scene is also undergoing transformations, signalling a broader recovery. Regent Property Group recently submitted plans for the city’s first Radisson apart-hotel, aimed at revitalising a previously neglected area. This aligns with trends influenced by changing consumer preferences post-pandemic, as stated by Jay Singh, director of Regent. He reaffirmed their commitment to investing in Glasgow despite the current economic climate, highlighting the positive outlook for the city driven by such ambitious projects.

These developments in the hospitality sector echo a growing sense of optimism that Glasgow is beginning to recover from the upheavals of the pandemic. Although individual projects may not significantly shift the overall economy immediately, they reflect a renewed confidence among investors about the city’s future. Adela Cristea from Radisson expressed support for this sentiment, linking their decision to expand in Glasgow to the success of existing venues like the Radisson RED Hotel, which has further inspired investment in new concepts.

As the whisky and hospitality industries navigate through these transformative times, they reflect both the uncertainties and the potential for growth present on the horizon.

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Source: Noah Wire Services