India-UK FTA with reduction in tariff on Scotch whisky will give consumers more choice: ISWAI

Ahead of the G20 Leaders’ Summit, which is expected to give further impetus to the India-UK Free Trade Agreement (FTA) talks, the International Spirits and Wines Association of India (ISWAI) and the Scotch Whisky Association in a joint statement has expressed hope of a successful conclusion that would benefit both economies while trying to ease concerns over the impact of reduced tariffs on Indian liquor firms. 

Import of premium Scotch whisky from the UK at lower tariffs is a key part of the India-UK trade talks and is expected to provide a minimum import price for bottled scotch although there have been concerns about the impact on domestic industry. 

Nita Kapoor, CEO, of ISWAI, said, “Should the FTA talks deliver a substantial reduction in India’s 150 per cent tariff on Scotch whisky, exports of Scotch will undoubtedly be boosted, and consumers will have more choice as smaller producers enter the market.” 

She also said it will benefit India-Made Foreign Liquor (IMFL) brands by reducing import costs and would be a further boost for jobs and investment in the manufacture of bottled-in-India Scotch and premium Indian whiskies for the Indian market that could then be sold in other markets as well. 

Mark Kent, CEO, of SWA, said, “For Scotch Whisky distillers, India is a unique market. Only 24 per cent of exports to India are bottled in Scotland. Most Scotch Whisky sold in India is bottled locally, while bulk Scotch Whisky is an important ingredient in Indian whisky.” 

He further tried to allay concerns and noted that given domestic whisky producers' size, popularity and market power, imported Scotch Whisky will pose very little direct competition to Indian whisky

According to Kapoor, the total Indian spirits market amounted to 367 million cases in 2022, with Indian whisky selling 234 million cases. Scotch Whisky accounted for sales of 8.1 million cases in India, which is less than 3 per cent of the total whisky market.

India and UK recently concluded the 12^th round of negotiations for the trade pact and the 13^th round is expected to take place this month. It is expected that the talks would get a further boost during the G20 Summit which is likely to be attended by UK Prime Minister Rishi Sunak. The two countries have been hopeful of concluding the talks this year.

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