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US-India alcoholic beverages trade - Challenges & opportunities
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Friday, 21 March, 2025, 15 : 00 PM [IST]
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Nikhil Agarwal
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American whiskey is in the news these days because post the Trump -Modi meeting, Indian customs duties have been cut on Bourbon. This will give way to better prices and more options of brands available. The customs duties which were 150% have now been reduced to 100%. Since customs duty is always at the start of any cost ladder, the duty reduction will have a domino effect on the following percentages of margins and VAT. This Is good news for all of us who like Bourbon based cocktails and of course Bourbon to sip on itself.
The whiskies from America are unique, you would be left wondering with no answer in sight to come up with a country or region that makes a whiskey like Bourbon for example. Distilling in the US, is as old as four hundred years or more when hopeful immigrants from Europe came to the new land bringing with them their distilling know how. They found an abundance of rye and corn and started using it to distil whiskey.
Even George Washington, the first President of the United States was a Rye Whiskey distiller, a whiskey that you can still buy today. You would not be wrong to think that American whiskey is part of the very fabric that is America itself.
When you think of American whiskey, you think Bourbon, you think Rye. But they also make some single malt whiskies and the ever-popular Tennessee whiskey needs no introduction.
We have had American whiskies in India for a long time. American whiskies that have been available have been for the most part big brands that were priced in some cases aggressively and targeted towards a mass audience. There are some exceptions to this of course. More takers for this category are being added every day as millions of young adults move into legal drinking age. It’s also easy to like, Bourbon is aged in new charred American oak and made predominantly from corn, giving the spirit a sweet, spicey, woody note. This taste profile is very popular and one that matches Indian preferences too.
However, as India evolves, so has what discerning Indians like to drink with quality becoming an important parameter when making a buying decision. Drinkers of Scotch for example are able to move up the ladder of quality fairly easily because of the sheer number of expressions available.
Similarly, there has been growing demand for higher end expressions of American whiskey and brands catering to this new demand have been slowly trickling in. The category itself has been growing consistently specially in the last couple of years. The frequency at which I am asked for the availability of higher end expressions of American whiskies is increasing, a telling sign of things to come.
This pace of growth is about to change with the duty cut and I bet that by this time next year a plethora of new high-quality brands will be available on retail shelves with people drinking Bourbon becoming more commonplace especially in the major metros. Every importer or multinational with access to Bourbon must be fast tracking their business plans to bring Bourbons to India to take advantage of the duty cut.
For American whiskies that are already available in India I think prices will come down by 15% to 20% which will allow a whole new segment of people to give Bourbon a try. This percentage could defer from state to state. In some states prices may take longer to come down owing to their own state excise policies. The extent to which brands reduce their price however is still to be seen but prudent brand representatives would be wise to take the full advantage of this cut.
Bourbon is already popular as a base spirit in some classic cocktails. With cocktail culture firmly taking centre stage in India, it’s not surprising to see American whiskies being used to create hedonistic tipples across the board.
Leading bartenders and respected bars have great cocktail programs featuring a variety of base spirits, Bourbon will now become more accessible and more feasible to add to cocktail menus. This in turn will expose more consumers to Bourbon converting some of them to loyalist of this category.
Another major change I do foresee that see is that people who like to drink their whiskies neat or perhaps with a cube of ice, will now drink higher end expressions of Bourbon the very same way. You can expect the duty-free offerings at airports to reflect the growing popularity of this spirit too.
Of course, things do not happen overnight, it’s taken decades to get this duty reduction itself. People’s tastes do not change overnight either and getting India to forget their Scotch hangover will take time as well.
At the end, every win however small is accepted, we in India pay too much money for our spirits and wines compared to anywhere else in the world. If Bourbon leads the way to getting duties on other categories to also be reduced, more power to it.
I’ll take another Mr President and do keep them coming.
(The author is founder at All Things Nice)
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