Whisky sour: Politics in India-UK trade talks
free trade deal, proposals for whisky are proving hard to swallow for both sides. That’s because Indians are the world’s biggest consumers of Scotch and UK the biggest producer. Mint takes a look at the bigger picture.
India is among the most lucrative markets in the world and is catching the attention of the global whisky industry. Last year, India displaced France as the world’s largest buyer of Scotch whisky by volume despite imposing an eyewatering import duty as high as 150%. The UK, which is home to the largest scotch whisky producers, based in Scotland, is vigorously pushing for a reduction in duty to have a larger piece in the fast-growing Indian whisky market under the ongoing free trade agreement (FTA) negotiations.
The whisky market in India is expected to cross a market size of $22 billion by 2027. Some Indian industry participants in the talks say Scotland’s long-held pro-independence demand may be a factor in the tough UK stand 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 comprise only 8% of the British population, the region is rich in North Sea oil resources and breweries. The UK government, having rejected an independence referendum, wants the FTA to be seen to benefit Scotland’s whisky industry that employs 11,000 people in mostly rural areas of Scotland. Scotch whisky is also the biggest UK drink export.
India is prepared to offer bigger tariff concessions for bulk whisky imports compared to bottled whisky to help produce jobs in Indian bottling plants. India may offer a tariff cut on bulk whisky to 75% in the first year, going down to 25% in 10 years. The UK is pushing India to cut tariffs on bottled whisky
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