India-UK FTA pits Indian whiskey makers against the Scottish Regards

  • 17-May-2023
  • India-UK FTA pits Indian whiskey makers against the Scottish Regards

An argument over the "angel's share" has broken out amid ongoing discussions about the potential free trade agreement (FTA) between India and the UK, pitting Indian whisky producers against Scottish brands.

India is a significant market for Scotch whisky produced in the UK. In the continuing negotiations over the deal, one of its numerous demands is a decrease in the import duty on Scotch whisky, which is now set at 150%. 

The spirit must also be three years old to qualify as whisky, according to the request. The TOI said on Monday that Indian producers countered that because the climate is hotter here, they will lose more than one-third of the whisky as a result.

To avoid the practise of under-invoicing when multinational corporations send their products to their subsidiaries in India under transfer pricing, Indian spirits producers are also asking for a minimum import price of $5 (at cost, insurance, and freight level).

Indian manufacturers oppose the UK manufacturers' proposal to cut the import duty from 150% to 75% immediately after the FTA is signed and then to 30% over the following three years. "We are willing to make a decrease, but not on the level they are recommending. We want it to be cut in half gradually over ten years.

In the midst of current discussions between India and the UK on a free trade agreement (FTA), India's alcohol industry earlier this year reported a 40% increase in whisky imports in the first eight months of this fiscal year compared to the whole fiscal 2021–22.

However, India imported whisky of $278.47 million from April to November 2022–23, compared to $199.02 million for the entire FY22. In the first eight months of current fiscal year, imports from the UK totalled about $200 million, as opposed to $148 million in the full fiscal year that concluded in March 2022 according to Import Export Data.

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