New Delhi With India and Britain ending their third round of talks for a free trade agreement on Friday, the UK whiskey industry is set to get a major share of the Indian market. In an interview with Mint, Scotch Whiskey Association chief executive Mark Kent gave his projections that the UK’s share of the Indian whiskey market will increase from just 2% to around 6% when the agreement comes into force. While Kent expects India to reduce import duties on Scotch whisky in phases, he indicated that Britain may not remove the three-year maturity condition for Indian whiskeys to have easier access to the British market, which That has been the main demand of the domestic market. alcoholic beverages sector. Edited excerpt:
Do you see whiskey as part of an interim agreement between India and the UK?
India is the most important consumer of whiskey in the world. Therefore, it is important for us to export more whiskey to India. There is a lot of information about Scotch in India and reducing the tariff will be a win-win for all as it will give more income to the Indian authorities through higher taxes. We are engaged in talks at the moment, and we will have to wait to see how it develops. Certainly, I think everyone is aware of the potential benefits for Scotch in this market and for the Indian whiskey industry.
What are the chances of increasing Scotch exports to India with the FTA?
Scotch exports to India account for 2% of the entire market, and Indian whiskey production accounts for more than two and a half times the global production of Scotch whisky. So we’re not talking about Scotch’s influx of whiskey. We’re still talking about relatively small quantities, but as you know, a significant amount of Scotch in India is exported for blending and bottling. She goes. With the increase in the volume of Scotch exports, employment and investment in India will also increase.
What size of the Indian market do you aim to capture from the current 2%?
We are talking about a high value, premium product. So volumes aren’t going to be great, but even if we move into 5-6% of the market, with a phased reduction in tariffs, we think this could increase Government of India revenue by around £3.5bn Is. , both center and state. Hence significant amount of tax collection can be increased.
Do you expect 50% fee reduction from the current 150%?
We want the tariff to be abolished. Because it is in everyone’s interest. The description in the UK is the same as in the EU, and that is the spirits drink. So somewhere you must have the word spirit drink, but it does not affect the branding of the product. It’s just that you can’t use the word whiskey.
Is there any difference in taxation?
No, in the UK all spirits are taxed on the same level. So no difference in terms of taxation, no new duty. That’s the only word used. May be sold in the UK by mandatory category description to appear on the label.
Do you think there would be no compromise without the inclusion of Scotch whiskey?
We certainly would like that to happen. This is going to be an important part of the agreement for both the countries. This is a win-win for both the consumers.
What about the entry of Indian whiskey into the UK? Do you see that trade barriers for Indian whiskey makers are also being resolved under the agreement?
Whiskey is an export product. About 95% of our production is exported, so we are very supportive of free trade. And the same goes for the entry of Indian whiskey into the UK market. We think there is potential to do more here in terms of imports. We already have a lot of Indian whiskey coming to the UK. We do not see any issue of accessibility for Indian souls. Indian spirits always had access to the UK market. So we look forward to being able to drink more Indian whiskey in the UK in the future as well.