Whiskey producers in the United States have found themselves caught in the middle of a trade war between the Trump administration and what feels like the rest of the world.
American spirits were being pulled from shelves in Canadian stores in response to potential tariffs, while the EU trade bloc are set to enforce a steep 50% tariff on all US whiskey entering the region.
US made whiskies are already suffering from a shrinking market. Following years of growth between 2019 and 2022, sales of bourbon have declined domestically and internationally. For example, the volume of bourbon sales dropped by 2% in the first eight months of 2024.
To help counter these additional pressures faced by an industry with its back to the wall, distillers are setting their sights on new markets for their produce. One country in particular has caught their attention: India.
There are many benefits in targeting the Indian market. The country has a rising population, estimated to be nearing 1.5 billion people. Notably, India has a growing middle class and a larger percentage of the population is finding itself with more disposable income.
India is the second largest market for whisky in the world, behind only the United States itself. It is estimated that around 6 billion lites of alcohol were sold in India last year, said to be worth US$33 billion to spirits industries around the world. Approximately 95% of all spirits sold in the country are brown spirits, with Scotch and domestically produced whisky making up the bulk of this percentage.
However, bourbon barely contributes to these figures. Data from 2024 shows that only around US£8.8 million worth of bourbon was exported to India, making the country the in 23rd place for American whiskey exports. This is behind much smaller countries such as Singapore and New Zealand.
Now the companies behind some of the biggest names in American whisky are looking to expand their presence in the country.
Greg Hughs, president of Suntory Global Spirits - who produce Jim Beam and Makers Mark -, has said: “we’ve all increased production to catch up with demand and now we’ve caught up. So now we’re ready to experience … the unknown demand that exists across the entire world.”
He continued: “India’s a huge opportunity market for the spirits industry … If we can get 5 (per cent) of the Scotch market in India, we’ll have all the distilleries in Kentucky full.”
His sentiments were echoed by Kate Latts, president of Heaven Hill Brands (Elijah Craig and Evan Williams, among others): “If we could just get… a little bit of that Scotch and beer consumption, we’re going to be in a place where we don’t have enough.”
A recent agreement between President Trump and India’s Premier, Narendra Modi, may have set American whiskey on the path towards cutting into Scotch whisky’s marketshare in India.
India imposes a 150% tariff on all spirits entering the country. Groups representing the Scotch whisky industry have long called on the UK government to seek ways to lower this tariff - particularly in the years since Brexit -, however little progress seems to have been made on this front.
However, as part of a wider trade agreement between the two states, the US and India reached an agreement that saw the 150% import tariff on American whiskey drop to 100%. While 100% is still a hefty additional tax, it might just give US whiskey an advantage in the region.
Whether or not this tariff cut will act as the leg up American whiskey needs to increase its presence in the country remains to be seen. With the 100% tariff still in place, bourbon is not going to replace the cheaper, domestically producers whisky as the wider drink of choice.
At the other end of the price spectrum, bourbon will have to compete with Scotch in the premium and ultra-premium categories - the range of spirits favoured by the aforementioned growing, upwardly mobile demographic of the Indian population. While American whiskey can hold its own in this category in many markets around the world, it is undoubtedly fighting from behind in India.
Changing the perception and popularity (and thereby the fortunes) of American whiskey in India isn’t going to happen over night. Nevertheless, American whiskey is in a good position thanks to this recent agreement and producers can hopefully be optimistic about their future in that market.
