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The India-UK FTA will come into force from July 15th 2026

ICICIdirect Research 18 Jun 2026 DISCLAIMER

News: As per British High commissioner, The India-UK FTA will come into force from July 15th 2026. The deal has been cleared to come into force after some final trade deals were finalised between both sides. The tariffs on Scotch whisky will reduce from from 150% to 75% and then to 40% over the next 10 years as per the deal. Also, EU leader, Ursula von der Leyen announced that the India-EU trade deal will also be finalised by end of CY 2026. As per the proposed deal, Indian Tariffs on Wine manufactured & imported from EU27 countries will be cut from 150% to 75% & eventually to levels as low as 20% in the coming years. Indian Tariffs on beer manufactured & imported from EU27 countries will be cut from 110% to 50%. This will reduce the pricing premium of imported beers over Indian manufactured beers.

View: On the implementation of UK FTA, the cut on tariff on scotch whiskies and gin will be cost effective for Indian liquor manufacturers. Most of the companies under over coverage such as ABDL and Radico Khaitan imports scotch from UK in bulk quantity to blend with their premium liquor brands. Hence reduction in tariff will help to reduce the import cost of raw material thereby leading to improvement in gross margins and subsequent flow through to EBITDA margins. As per previous guidance, ABDL expects ~200bps margin accretion post the implementation of the UK FTA. Further, it does not expect any major advantage from EU FTA as the major imports from EU is vodka which is a very limited consumption market in India.

Impact: Positive

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