LONDON—Diageo PLC has succumbed to pressure from the Scotch Whisky Association to change what its highest-volume whiskey brand is called in markets outside of India, on concerns that customers could confuse the spirit with Scotch, according to people familiar with the matter.

Diageo will rename McDowell’s No. 1 outside of India, in markets such as Abu Dhabi, Dubai and Nigeria. The world’s largest spirits maker has also agreed to end exports of Indian whisky brand Bagpiper as part of its deal with the SWA, the trade body for...