Business · Trade · 11 hrs ago

India says bulk Scotch imports are covered by lower trade-pact tariffs

India says bulk Scotch imports are covered by lower trade-pact tariffs

India has assured liquor companies it will honour the UK trade pact and resolve a dispute over Scotch whisky tariffs.

The issue involves bulk Scotch imported into India and bottled locally, as well as companies including Pernod and Diageo.

Under the pact, the duty on eligible Scotch fell from 150% to 75% in July, with further reductions planned over 10 years.

Industry groups argue bulk whisky should qualify because it remains Scotch, but tax authorities have questioned whether it belongs in a category charged the higher rate.

The classification could determine whether bulk imports get the tariff cut, affecting costs for companies that bottle or blend whisky in India.

Lower duties have already begun to support margins at some liquor makers, although the size of the benefit remains uncertain.

The commerce ministry is expected to discuss the dispute with industry representatives, and the companies have sought a legal opinion.

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What people are saying

Commerce ministry sourceUnnamed source familiar with the meeting
Bulk Scotch whisky imports are indeed part of concessions under the trade deal
via Business Standard
CIABC director-general Anant S IyerIndustry association director-general
The ministry's commitment to honour FTA obligations, while safeguarding the interests of domestic alcobev industry, gives the sector the confidence it needs.
via Mint
Allied Blenders & Distillers managing director Amar SinhaLiquor company executive
Nearly 80% of Scotch whisky imported into India arrives in bulk and is bottled locally, while only about 20% comes in finished bottles.
via Mint