India to hold talks with liquor firms over Scotch import dispute
Domestic and foreign companies have expressed concern after the government excluded bulk Scotch imports from tariff reductions.
The Indian government will hold closed-door meetings with senior executives from domestic and foreign liquor companies on Monday, according to the Deccan Herald. The talks follow concerns regarding a federal investigation into bulk Scotch imports.
New Delhi has informed major companies that bulk Scotch imports do not qualify for the tariff reduction from 150 per cent to 75 per cent agreed upon in the India-UK trade pact implemented in July. The International Spirits & Wines Association of India, which represents Diageo and Pernod, has privately warned that excluding these imports could undermine the pact.
The Confederation of Indian Alcoholic Beverage Companies (CIABC) has also joined the protest. In a confidential letter to the government dated October 27, the CIABC stated that excluding bulk Scotch used in local manufacturing could incentivise the import of finished products instead.
The CIABC, whose members include Radico Khaitan and Allied Blenders and Distillers, said such a move would contradict the goal of boosting domestic manufacturing under the Make in India initiative. Allied Blenders noted in an investor presentation that it is a large importer of bulk Scotch.
Approximately 80 per cent of Scotch whisky imports from Britain arrive in bulk by volume. While the $65 billion alcohol industry in India expected the tariff cuts to support business, the commerce ministry has not yet commented on the matter.