As India and the UK discuss a range of products in talks over a free trade Okay, the whiskey proposals are proving hard for both parties to swallow. This is because Indians are the biggest consumers of Scotch whiskey in the world and the UK the biggest producer. Mint takes a look at the big picture.
As India and the UK discuss a range of products in talks over a free trade Okay, the whiskey proposals are proving hard for both parties to swallow. This is because Indians are the biggest consumers of Scotch whiskey in the world and the UK the biggest producer. Mint takes a look at the big picture.
Is India a key market for Scotch whisky?
India is among the most lucrative markets in the world and is capturing the attention of the global whiskey industry. India last year displaced France as the world’s largest buyer of Scotch whiskey by volume despite imposing an import duty of up to 150%. The UK, which is home to the largest producers of Scotch whiskey, based in Scotland, is pushing hard for reduced tariffs in order to have a bigger slice of the fast-growing Indian whiskey market under the of the ongoing negotiations of the free trade agreement (FTA). The whiskey market in India is expected to cross a market size of $22 billion by 2027.
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Is India a key market for Scotch whisky?
India is among the most lucrative markets in the world and is capturing the attention of the global whiskey industry. India last year displaced France as the world’s largest buyer of Scotch whiskey by volume despite imposing an import duty of up to 150%. The UK, which is home to the largest producers of Scotch whiskey, based in Scotland, is pushing hard for reduced tariffs in order to have a bigger slice of the fast-growing Indian whiskey market under the of the ongoing negotiations of the free trade agreement (FTA). The whiskey market in India is expected to cross a market size of $22 billion by 2027.
Is UK domestic politics driving the whiskey talks?
Some Indian industry participants in the talks say Scotland’s long-running demand for independence may be a factor in the UK’s tough stance on whisky. The context of the brexit referendum, where 62% of Scots voted to be in the EU, is also linked, they say. Although the Scots make up only 8% of the British population, the region is rich in breweries and North Sea oil resources. The UK government, having rejected an independence referendum, wants the FTA to be seen as benefiting Scotland’s whiskey industry, which employs 11,000 people in most of Scotland’s rural areas. Scotch whiskey is also the UK’s largest beverage export.
What is the current state of the whiskey negotiations?
India is prepared to offer higher tariff concessions for bulk whiskey imports compared to bottled whiskey to help create jobs at Indian bottling plants. India can offer a tariff reduction on bulk whiskey to 75% in the first year, down to 25% in 10 years. The UK is lobbying India to reduce tariffs on bottled whiskey imports to 30% over 3 years, starting with 75% in the first year.
Are there other disagreements?
While the UK is seeking a sharp reduction in India’s tariff structure, it has held off on lawsuits to relax its three-year maturation rule which is seen as a barrier by Indian whiskey makers seeking access to Indian whiskey. in the United Kingdom. Under UK law, all whiskey must be matured for a minimum of three years. The Indian industry argues that ripening in India is faster due to the warmer Indian climate and that therefore the UK should relax the three-year ripening rule if it wants better access for its produce in India.
What worries Indian whiskey makers?
A jump in imports despite high tariffs. Indian brewers are concerned that the FTA could further shrink their market as Scotch, consumed mainly by high-income groups, has a commanding share of total Indian whiskey imports. It comprises 96% of India’s whiskey imports and has a more than 80% share of the Indian premium whiskey market, especially products above Rs 1,000 per 750ml bottle. Non-Scotch products in the same price range are small in volume and offer little opportunity for growth compared to Scotch.
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