A trade group representing major liquor makers Diageo and Pernod Ricard has stated that India's move to exclude bulk Scotch imports from a reduced tariff goes against provisions agreed upon in the India-UK trade deal.
According to a letter seen by Reuters, the issue centers on whisky tariffs, which were a major sticking point during the years of negotiations leading up to the trade pact's implementation on July 15. India eventually agreed to a significant concession for the UK's Scotch industry.
Under the deal, India consented to immediately halve import taxes on certain Scotch imports from 150% to 75%, with a further reduction to 40% over the next 10 years. This was seen as a major victory for itish producers.
However, the trade group now argues that a recent decision by India undermines the benefits of this agreement. India has reportedly decided not to apply the reduced 75% tariff to "bulk" Scotch imports, which are shipped in large containers to be bottled locally in India.
The letter argues that this exclusion violates the spirit and letter of the trade agreement and weakens the expected benefits for UK producers. The group is urging Indian authorities to reconsider the decision and fully implement the commitments made in the trade pact.
This dispute could become the first significant challenge to the newly implemented trade deal between the two nations. The Scotch whisky industry had high hopes that the agreement would open up one of the world's largest potential markets for its products.
Source: Reuters
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