New Delhi : While talks for an India-UK free trade agreement set to gain momentum with Rishi Sunak as British prime minister, consensus on Scotch whiskey tariffs appears elusive, with Britain cutting tariffs sharply in three years has demanded. 75% if the proposed deal and agreement comes into force.
New Delhi has proposed a reduction in tariff by 100% in the first year and then by 50% in 10 years. India has also proposed a minimum cap of $5 per 750ml on cost, insurance and freight (CIF) basis on UK whiskey to qualify for concessions under the proposed FTA, sources familiar with the matter said. .
Indian industry has also been demanding easier entry of Indian whiskey into the UK market by removing the stipulations relating to a minimum maturity of three years for all alcohol, including whiskey exported from India. Indian whiskey is sold in the UK market under the name ‘Spirits’.
Further, the UK is seeking relaxation in the rules of origin for alcoholic beverages, while India insists on 40% value addition norms to take advantage of the concessional tariff.
While Scotch whiskey will be able to meet this condition, other liquors may not be able to meet the criteria.
“We have had several rounds of discussions with the industry on various sectors including alcoholic beverages and are in talks to ensure that they benefit from the treaty. We are taking his views into account… talks with a stable government in the UK could intensify,” a government official said.
The Indian alcoholic beverage industry is of the view that the “fair tariff rate” should be in the range of 100-75% in the near term and 75-50% in the long term, as any rate below that would create a distorted sector. In favor of imports where the cost advantage would adversely affect the Indian industry.
The 150% tariff on alcoholic beverages by India includes 50% basic customs duty and 100% Agriculture Infrastructure Development Cess.
Both sides have so far temporarily closed 16 of the 26 chapters. Agreement is still awaited on thematic issues, including Scotch whiskey and fees on visas.
The new British Prime Minister of India-origin has been vocal about the India-UK trade deal and has supported further easing of the British visa regime for Indians.
Director Vinod Giri said, “As far as we know, the British side is seeking reduction in customs duty on Scotch whiskey and other alcoholic beverages from the current 150% to 75% immediately and then to 30% over a period of three years. Is.” General, Confederation of Indian Alcoholic Beverage Companies.
He said the association has suggested that the duty can be reduced to 100% to prevent dumping and then to 50% over a period of 10 years.
“We also agree with more concessions on whiskey imported and bottled in bulk here as it supports some of the local economic activity in India. But for the deal to work for both parties, we believe the UK needs to remove its stipulation that the spirit must mature for at least three years to be called whiskey because it is effectively exported from India. controls the bulk of it and is neither supported by Indian laws nor suitable for Indian climatic conditions,” Giri said.
Questions emailed to India’s Department of Commerce remained unanswered till press time.
India and the UK formally started talks for a free trade agreement in January this year and have completed five rounds of talks so far.
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