Scotch Whisky producers have welcomed the Indian government's announcement that the import duty on Scotch will be reduced with immediate effect to 150%, in line with India's GATT commitments.  The reduction was included in a 'mini-Budget' published on Thursday last week.  Distillers warn, however, that further steps must be made before Scotch is able to compete fairly in India. 

The industry's concerns about the Indian tariff and tax system for spirits were regularly raised during last week's visit to India by the UK Trade Minister Mike O'Brien MP, who was accompanied by The Scotch Whisky Association (SWA).

India also announced that it would immediately eliminate the Special Additional Duty (4%), introduced in 2001, which discriminated against imported spirits. 

Speaking in India, Tim Jackson, the SWA's Director of International Affairs, said: "Distillers will welcome India's decision to reduce the basic import duty, from 166% to 150%, two months ahead of the GATT agreed timetable. The elimination of the Special Additional Duty also removes an area of industry concern.

"Whilst both announcements are steps in the right direction, it must be remembered the overall Federal Duty Burden on Scotch and other imported spirits will still be exorbitant, ranging between 213% and 525%.  In practice, the measures are therefore likely to have little impact on improving market access for Scotch Whisky or in removing the incentive for smuggling." 

Jackson added:  "We will continue to seek fairer market access for Scotch and encourage the Indian government for more significant improvements in the overall duty burden, especially regarding the Additional Duty, in the run up to the Indian Budget."