Guwahati: The UK and India are in a negotiation process for a free trade agreement (FTA) and during this one of the key demands of Britain, the duty reduction and gradual zero duty on alcoholic beverages are considered to be accepted by India.
In India, the customs tariff for imported Scotch is 150 per cent.
As the negotiations are being undertaken, the industry, through UK’s trade negotiators, is said to be pitching for the inclusion of Scotch among the list of items that are considered for gradual tariff reduction in the India-UK early harvest FTA deal.
With this, the industry hopes for a 50 per cent reduction in the tariff in the first year.
Along with this, it hopes for a 90 per cent reduction and in five years, the elimination of duty.
As per reports, Jean – Etienne Gourgues, chairman & CEO at Chivas Brothers said that the UK-India FTA is a big priority for the Scotch industry given it is the second-largest market for Scotch whisky by volume.
“The current tariff of 150% is extremely high compared to China (5%), Thailand (60%), and South Korea (zero). Since 85% of Scotch exports to India are bulk whisky for India’s own booming domestic and export whisky industry, tariff cuts for Scotch offers plenty of scope for local producers in a growing market,” he added.
It may be mentioned that Chivas Brothers is the Scotch whisky division of Pernod Ricard, the leading global player in wines and spirits.
It consolidated sales of over $9 billion in FY21.
India is said to be the second-largest market by volume for Chivas Brothers.
Thibault Cuny, MD & CEO, Pernod Ricard South Asia & India speaking on the topic said, “Cutting tariffs could more than double UK exports of Scotch in five years. We believe tariff cuts for Scotch should be part of any interim (FTA) deal if one is agreed upon.”
He added that despite fears to the contrary, cutting tariffs would raise the Indian government’s revenue.
“Scotch Whisky Association modelling indicates that reducing Basic Customs Duty would raise an increase of around $4 billion (£3.4 billion) to the Indian government,” he said.