India-UK FTA raises concerns for domestic whisky players

Domestic whisky producers are concerned by India's proposed free trade agreement (FTA) with the UK as it could bring in a significant increase in flow in the shipment of popular imported whisky brands like Johnnie Walker Black Label and Chivas Regal in India.

The trade agreement is expected to have a minimum import price (MIP) for bottled Scotch along with reduced import duties for both bottled and cask whisky.

Under the proposed FTA, bottled Scotch above the MIP threshold could expect reduction in the import duties from 150 percent to 100 percent, while casks may attract a halved duty at 75 percent.

Although the details are still in process of negotiations there are talks on slowly lowering custom duty on bottled Scotch to 50 percent, over a span of 10 years. If this happens then it would be a setback for domestic whisky players in India.

During the recent years, there has been an increase in bottled Scotch imports despite no reduction in import duty on Scotch products.