Deal sealed, but Scotch to stay pricey till 2035 | India News
NEW DELHI: The much-anticipated duty cuts for Scotch and gin is not happening overnight. While import duty will come down from 150% to 75%, it is unlikely to happen until at least the second half of 2035.That’s because the agreement will take at least a year to be ratified by the British Parliament and there is a gradual tariff reduction roadmap starting with duties in India dropping to 110% in the first year of implementation. The UK government said customs duty will reduce to 40% over the next decade.What’s more, govt has got the UK to agree to a minimum import price which means, whisky, gin or any other drink that costs under $5 in a one litre bottle or $6 in a 750 ml bottle will get the tariff benefit and the MIP will be indexed to inflation.However, industry officials say that despite halving import duty, the actual reduction of consumer prices will not be more than 10%. “The share of customs duty to the overall structure of MRP is hardly 15-20%, depending on the category. The rest comprises state govrnment taxes, and distribution margins. So actual consumer prices will come down by only 8-10%,” an official said.The reduction in import duty will be a benefit for manufacturers of Indian Made Foreign Liquor. Around 80% of imported scotch is in bulk form, which is used for bottling in India and for blending by local whisky brands.But the industry cheered the move. Sanjit Padhi, CEO of International Spirits and Wines Association of India (ISWAI), said the agreement paves the way for a more balanced and equitable trade environment, particularly as Indian alcohol exports to the UK have zero import duties.“We laud the Indian and British governments for formalising this historic treaty which will boost bilateral trade and positively impact the accessibility of premium Scotch whisky in India, reigniting growth and increased choice for Indian consumers,” Praveen Someshwar, MD and CEO of Diageo India, said.
