NEW DELHI : As India and the UK conclude the third round of talks for a free trade deal on Friday, the UK whiskey industry is seeking a bigger share of the Indian market. In an interview with Mint, Scotch Whiskey Association chief executive Mark Kent said he estimates the UK’s share of the Indian whiskey market will grow from just 2% to almost 6% when the pact would come into force. While Kent expects India to gradually reduce import duties on Scotch whiskey, he indicated that the UK may not remove the three-year maturation condition for Indian whiskeys in order to easier access to the UK market, which has been a key domestic market demand. alcoholic beverages sector. Edited excerpts:
Do you see whiskey as part of an interim agreement between India and the UK?
India is the biggest consumer of whiskey in the world. It is therefore important for us to export more whiskey to India. There is a lot of knowledge about scotch in India and by lowering the tariffs everyone will be a winner as it will result in more revenue for the Indian authorities through higher taxes. We are negotiating right now, and we have to wait to see how it develops. Certainly, I think everyone is aware of the great potential gains for Scotch in this market and for the Indian whiskey industry as well.
What is the potential for increased Scotch exports to India with the FTA?
Scotch exports to India account for 2% of the overall market and Indian whiskey production is more than two and a half times the world’s Scotch whiskey production. So we’re not talking about a flood of Scotch whiskey, we’re still talking about relatively small quantities, but as you know there is a significant amount of Scotch exported to be blended and bottled in India. Increasing the export quantity of Scotch will also result in more jobs and investment in India.
What size of the Indian market do you want to conquer from the current 2%?
We’re talking about a high-end, high-value product. Volumes will therefore not be large, but even if we move to 5-6% of the market, with a gradual reduction in tariffs, we believe that this could lead to an increase of almost £3.5 billion in revenue for the Indian government. , both the Center and the States. Thus, significant amounts of tax revenue could be increased.
Do you expect a 50% duty reduction from the current 150%?
We would like the elimination of tariffs. Because it is in everyone’s interest. The description in the UK is exactly the same as in the EU, i.e. a spirit drink. So somewhere you have to have the word spirit drink, but that doesn’t affect the branding of the product. It’s just that you can’t use that word whiskey.
Is there a tax difference?
No, all spirits in the UK are taxed at the same level. So no difference in taxation, no new tariff. It’s just the use of that word. Can be sold in UK per mandatory category description must appear on label.
Do you think there will be no deal without the inclusion of scotch whisky?
We certainly wish that were the case. This will be an important part of the pact for both countries. It’s a win-win for both consumers.
What about the entry of Indian whiskey into the UK? Do you think trade barriers for Indian whiskey makers will also be resolved under the pact?
Whiskey is an export product. About 95% of our production is exported, so we are very much in favor of free trade. And that goes for the entry of Indian whiskey into the UK market. We believe that more can be done here in terms of imports. We already have a lot of Indian whiskey coming to the UK. We see no access problem for Indian spirits. Indian spirits have 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.