These AlcoBev stocks are in high spirits after India-UK FTA cuts down import duty on scotch whiskey

Shares of liquor manufacturers rallied in Thursday’s trade after reports indicated that the India-UK Free Trade Agreement (FTA) is set to come into effect from July 15, paving the way for a significant reduction in import duties on Scotch whisky and gin.Shares of United Spirits, Radico Khaitan, Allied Blenders & Distillers, and Tilaknagar Industries were among the key gainers as investors cheered the potential benefits of lower import costs and improved profitability.

Under the agreement, the current 150% import duty on Scotch whisky and gin will be cut to 75% immediately upon implementation. The tariff will then be gradually reduced to 40% over the next 10 years.
Industry experts believe the duty reduction could translate into a 5-15% price benefit for consumers, which may help drive volumes in the premium and prestige-and-above (P&A) liquor segments.Analysts expect companies with significant exposure to imported Scotch and premium spirits to be among the biggest beneficiaries of the agreement.

According to analyst estimates, United Spirits could see annual savings of ₹110-120 crore from the lower duties, while Radico Khaitan may benefit to the tune of ₹70-75 crore. Allied Blenders & Distillers is estimated to save around ₹30-35 crore.