The deal represents a major strategic play for Diageo in a fast-growing market where Pernod Ricard—with its Royal Stag, Imperial Blue and Blenders Pride Indian whiskies—has long had the better of its top global rival. With Diageo now gaining a share in USL's dominant local spirits business—and, perhaps more importantly, a formidable distribution network from which to build its global brands like Smirnoff and Johnnie Walker—competition between it and Pernod in India's spirits market is about to heat up.