New Delhi, July 15 -- India's trade deal with the UK could make premium whisky more accessible to Indian consumers, but the same tariff cuts could make it harder for the country's young single malt industry to build capacity.

The India-UK free trade agreement, which took effect on Wednesday, immediately halves import duties on Scotch whisky and gin to 75% from 150%, with tariffs set to fall further to 40% over the next decade. The immediate impact is expected to be lower prices for imported spirits, although the benefit to consumers will depend on how much of the duty savings companies and distributors pass on.

For domestic distillers, the trade-off is sharper: cheaper imported Scotch could accelerate premiumization and lower input cost...