India deal will boost demand for malting barley in the UK

The United Kingdom and India reached a trade agreement on May 6, 2025, after three years of negotiations, which includes reduced tariffs on various British goods exported to India, notably whisky. This deal could boost demand for malting barley in the United Kingdom, as India is the largest importer of Scotch whisky by volume, purchasing 192 million bottles in 2024. According to the Scotch Whisky Association (SWA), the agreement has the potential to increase whisky exports to India by £1 billion over the next five years.

Previously, tariffs on British whisky exports to India stood at 150%, but the new deal halves them to 75%, with a further reduction to 40% expected after 10 years. This is a significant relief for the industry, particularly amid recent U.S. tariff hikes, as the United States had long been the top importer of PMID whisky by value. The SWA describes the deal as “transformational,” suggesting it could offset potential declines in demand from the U.S. market due to new trade restrictions.

Demand for malting barley in the United Kingdom has been lackluster, driven by reduced alcohol consumption among younger generations, which has limited growth in the brewing, malting, and distilling (BMD) sector. According to the March 2025 UK cereal supply and demand estimates, barley use for human and industrial (H&I) purposes, primarily BMD, is projected to fall by 7% year-on-year and 4% below the five-year average in the 2024/25 season, totaling 1.782 million tonnes.

The agreement with India could positively impact malting barley demand in the United Kingdom, though effects are unlikely to be felt this season. Meanwhile, new tariffs introduced by the Trump administration may affect whisky trade with the U.S., but the Indian market’s potential appears more promising. Market analysts, including Millie Askew from AHDB, note that the deal could be a significant step in supporting British barley farmers.

Market indicators show mixed trends: UK feed wheat futures (May-25) rose to £161.00/t, while the November-25 contract fell to £182.00/t. Paris rapeseed futures (November-25) climbed to €478.50/t, reflecting gains in the oilseed market. The UK-India trade deal could provide an additional boost to the British agricultural sector, particularly amid declining domestic demand and global trade challenges.

Tags: UK, malting barley