INDIA – The Confederation of Indian Alcoholic Beverage Companies (CIABC) has raised concern about the increase in imports of whiskey drinks with the commerce and industry ministry, fearing that duty concessions in the trade pact would further increase imports and hurt domestic players.
According to data from the Scotch Whisky Association (SWA), India toppled France as the UK’s largest scotch market for the first time.
India topped the largest export destinations for Scotch Whisky defined by volume (70cl bottles equivalent) in 2022 after gaining a 60% rise to 219m bottles while France came second with 205m bottles, recording an up of 17%.
India is also the fifth on the list of the largest importers globally defined by a value having a 93% rise to £282m compared to £146m in 2021. In this listing, the US topped the list by value – it imported Scotch whisky worth £1.05bn ($1.27bn) in the year.
The global exports of Scotch Whisky grew to more than £6.2bn an increase of 37% for the first time in 2022.
Despite double-digit growth, Scotch Whisky still only comprises 2% of the Indian whisky market, with the UK association anticipating the India-UK free trade agreement (FTA) could boost market access for Scotland’s whisky companies, allowing for an additional £1bn of growth over the next five years.
In this latest report, the Asia-Pacific region overtook the EU, where there are established markets such as France, Germany, and Spain, taking 29% of total exports as the industry’s largest regional market, with double-digit growth in Taiwan, Singapore, India, and China as the post-Covid recovery continued.
Commenting on the figures, the UK Government’s Minister of State at the Department for Business and Trade Nigel Huddleston said the government is willing to continue to support the industry as it expands into new markets intending to reach £1 trillion in exports by 2030, thanks to the new trade agreements around the world such as CPTPP and in India.
However, citing the new imports data, CIABC noted that an increase in imports disproves the UK’s claims that Scotch whisky is not being given enough opportunities in India.
“The domestic alcoholic beverages industry is deeply concerned over this development that is happening even without the FTA with the UK. This puts a big question mark on the need for any concessions for Scotch whisky under the FTA,” CIABC director-general Vinod Giri said, adding that sales of Scotch whisky were growing 6-7 times faster than the domestic products.
In the FTA negotiation, the UK is said to be looking for a way in which India could reduce its customs duty on Scotch whisky, which is currently 150% to around 50% in phases as well as importing barrels of whiskey from the UK instead of bottles so that bottling and packaging can happen in India.
Giri also lamented over the underpricing in the country’s market, saying scotch whisky in India is sold by the parent company in the UK to its Indian subsidiary for just Rs 175 per bottle landed in Delhi, whereas the price for the same in Dubai is approximate ₹450-460 per bottle.
He added states like Maharashtra had given a special reduction to imported Scotch whiskies in an attempt to offset the customs duty, which is making foreign liquor more attractive.
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