Bulk Scotch Tariff Row: Commerce Ministry Meets Liquor Firms

Commerce ministry officials are holding closed-door talks on Monday, 2 November, with foreign and Indian liquor companies over a decision that bulk Scotch whisky imports do not qualify for the 75% tariff cut under the India-UK trade pact, Reuters reported, as carried by Business Standard. Diageo and Pernod Ricard, and now Indian distillers, have objected. The pact came into effect in July and lowers the duty on Scotch from 150% to 75%.

Why Indian Distillers Are Worried

About 80% of Scotch arriving from Britain by volume comes in bulk, to be bottled and blended in India for popular brands. If bulk shipments are kept out of the lower rate, companies that make such brands face a higher cost than those importing finished bottles.

The Confederation of Indian Alcoholic Beverage Companies, whose members include Radico Khaitan and Allied Blenders and Distillers, wrote a confidential letter dated 27 October. It argued the exclusion could push companies to import finished products, which would cut against Make in India.

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Trade Pact Under Test

The International Spirits & Wines Association of India, which represents Pernod and Diageo, has privately warned that excluding bulk Scotch could undermine the agreement. Britain and the Scottish government have raised the issue with India, according to the Reuters report. India has not commented publicly.

No official document explaining the classification has been made public, and the reports do not name the official who took the decision or give its date.

What to Watch After the Meeting

The meeting is closed to the press, so the outcome will depend on what the ministry or the companies say afterwards. Whether bulk Scotch is added to the 75% category, or stays at the earlier rate, has not been announced. More economy coverage is in Daily Updates.

Source: Based on reporting by Business Standard (Reuters), Economic Times and Times of India. No official document found; searched commerce ministry and PIB.

Image: Wikimedia Commons.