In the ongoing negotiations for a free trade agreement (FTA) between India and the UK, a unique twist has emerged – India’s reluctance to include bottled whisky in the agreement.
However, there might be a compromise on the table – allowing the import of Scotch whisky in large barrels that can be bottled within the Indian borders.
Two government officials, privy to the matter but speaking on the condition of anonymity, told a national business daily, shedding light on the intricacies of this potential arrangement.
The primary reason behind India’s cautious approach stems from concerns about under-invoicing by some foreign liquor companies.
Certain companies engage in under-reporting the value of bottled whisky during import, only to sell them in India at higher rates, the daily reported quoting the officials.
Currently, India imposes steep tariffs, reaching up to 150%, as a deterrent for alcoholic beverage imports, including whisky.
“There have been issues with under-invoicing when it comes to bottled whisky, hence the decision that you can bring it in barrels and bottle in India,” one of the officials told the daily.
Importing alcohol in barrels not only serves the purpose of blending but also reduces the likelihood of under-invoicing.
The officials highlighted that India’s stance on this matter was communicated separately to a UK minister last month, adding a layer of complexity to the negotiations.
In January, the 14th and final round of FTA negotiations commenced, focusing on resolving key issues such as business mobility, Scotch whiskey, automobiles, farm products, pharmaceuticals, rules of origin, and a separate agreement to boost bilateral investments.
The groundwork for the FTA negotiations was laid in 2022 when Piyush Goyal, the Minister of Commerce and Industry, alongside Anne-Marie Trevelyan, UK Secretary of State for International Trade, launched the negotiations in New Delhi.
The FTA aims to achieve the ambitious target set by Prime Minister Narendra Modi and his former UK counterpart Boris Johnson in May 2021 – doubling bilateral trade between India and the UK by 2030.
