 "India-UK trade deal: How traditional Indian brews like Feni and toddy will soon hit UK store shelves")
India’s homegrown craft beverages, including Goa’s fiery feni, Kerala’s palm toddy, and Nashik’s artisanal wines, are poised for a global debut in the UK. This comes after India and the United Kingdom officially signed the much-anticipated Free Trade Agreement (FTA) on Thursday during Prime Minister Narendra Modi’s visit.
The trade pact, which was agreed upon in principle earlier this May, aims to double the current bilateral trade and take it to $120 billion by 2030. For India’s liquor industry and several other key sectors, this is expected to be a game-changer.
Here’s what we know
Cheers to Indian craft beverages
With the FTA now in place, Indian alcoholic beverages will receive Geographical Indication (GI) protection in the UK and enjoy prime placement in retail and hospitality chains, where demand for natural and organic products is on the rise.
“Indian craft drinks like feni from Goa, artisanal wines from Nashik, and toddy from Kerala will now enjoy Geographical Indication (GI) protection and shelf space in high-end UK retail and hospitality chains,” an official from the Commerce & Industry Ministry told PTI.
This move aligns with the Indian government’s broader strategy to promote traditional alcoholic beverages globally. Although still a niche segment, the target is to increase India’s alcoholic beverage exports from the current $370.5 million to $1 billion by 2030.
Earlier in April, APEDA (Agricultural and Processed Food Products Export Development Authority) said Indian alcoholic beverages have huge potential in global markets and the country has a lot of good products, including gin, beer, wine, and rum, to offer to the world.
India is currently ranked 40th in the world for alcoholic beverage exports, and the target is to be among the top 10 exporters in the world in the coming years.
The country’s alcoholic beverages exports stood at over Rs 2,200 crore in 2023-24. The major destinations include the UAE, Singapore, the Netherlands, Tanzania, Angola, Kenya and Rwanda.
Scotch lovers in India have a reason to rejoice too
The benefits aren’t one-sided. Indian consumers will also gain from this agreement, especially whisky aficionados.
Top imported Scotch brands like Chivas Regal, The Glenlivet, Johnnie Walker, Singleton, and Talisker are set to become significantly more affordable in India.
So far, imported whisky and gin have been subject to a hefty 150 per cent import duty. Under the FTA, this will be reduced to 75 per cent immediately, and then to 40 per cent over the next ten years.
Beyond booze, what else will get cheaper?
Textiles & apparel
Indian garments and home textiles exported to the UK currently face tariffs of 8–12 per cent. These duties will now be eliminated, boosting India’s competitiveness against nations like Bangladesh and Vietnam.
Gems, jewellery & leather
Luxury items such as gold and diamond jewellery and leather goods will get duty-free access to the UK. This is expected to support MSMEs and help Indian brands tap deeper into European luxury markets.
Engineering goods & auto components
The UK will scrap import duties on Indian machinery, tools, and auto parts, opening doors for Indian manufacturers to become integral to UK and European supply chains.
Pharmaceuticals & medical equipments
Indian pharma companies will gain from faster regulatory clearances, especially for generic medicines. This will make it easier for Indian drugs to reach the UK’s NHS system, potentially speeding up approvals and increasing export volumes.
IT & professional services
The deal includes eased visa rules and mutual recognition of qualifications in professions like engineering, architecture, and accounting. This is expected to create 60,000 new jobs in the service sector, particularly in IT, finance, healthcare, and law.
Food processing, tea, spices & marine products
The European country will also cut duties on Indian processed foods, basmati rice, shrimp, spices, and tea, giving a fillip to exports from Kerala, Assam, Gujarat, and West Bengal. Under the FTA, premium Indian food brands will have enhanced access to the UK market.
Chemicals
Tariffs will also be removed on agrochemicals, industrial chemicals, and plastics. India’s chemical exports to the UK could double by 2030.
Green Energy & Cleantech
Indian electric and hybrid vehicle makers are also set to benefit with preferential access to the UK under a quota system. Welspun India, Arvind Ltd, Bata India, Relaxo, Tata Motors, Mahindra Electric, and Bharat Forge are among the companies likely to benefit from greater market access.
With input from PTI
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