Imports of UK bulk whisky may attract tariff concessions

India is considering offering higher tariff concessions for bulk whisky imports compared to bottled whisky as part of the ongoing India-UK free-trade agreement (FTA) negotiations. The approach aims to encourage the import of intermediate products and address a contentious issue in the trade discussions.

- Ravi Dutta Mishra & Dilasha Seth

The Indian government contends that bulk whisky imports can generate employment by setting up bottling plants in the country, as against finished products.

Meanwhile, local liquor producers are concerned that the India-UK FTA might lead to a surge in whisky imports, posing a threat to Indian liquor producers, already facing fierce competition from the UK, the world’s largest scotch whisky producer.

India overtook France to become the UK’s largest market for Scotch in terms of volumes, with a 60% surge in imports in 2022 from the previous year. India imported 219 million 70cl bottles of Scotch last year, according to the UK-based Scotch Whisky Association (SWA).

While the UK is pushing India to cut tariff on whisky imports to 30% from the current 150% in three years, starting with 75% in the first year, the Indian industry has suggested that the government reduce the tariff to 50% over 10 years, beginning with a duty cut to 100% in the first year. In the case of bulk imports, India may offer a tariff cut to 75% in the first year, going down to 25% in 10 years.