India’s attempt to exclude bulk Scotch imports from reduced tariffs goes against benefits agreed in the UK-India trade deal, local trade body the ISWAI has reportedly said.
Earlier this month, the Directorate of Revenue Intelligence (DRI) visited premises belonging to Pernod and Diageo’s subsidiary in India over the classification of some of their bulk imports.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Local spirits group Allied Blenders & Distillers also confirmed last week it had received a visit from Indian tax officials looking into the import of bulk Scotch into the country.
According to a letter, seen by Reuters but not by Just Drinks, the ISWAI wrote to the country’s commerce minister, arguing the classification matter “risks undermining, in practice, an important market-access benefit negotiated and agreed between India and the UK”.
According to Reuters, the International Spirits and Wines Association of India, whose members include Diageo and Pernod Ricard, added in its letter that the “preferential tariff treatment negotiated … could effectively become unavailable for these imports.”
Just Drinks has contacted the ISWAI and India’s commerce ministry for further information on the letter.
The trade deal between the the UK and India has been effective since July. It lowered India’s import duties on UK whisky from 150% to 75%. These are to be reduced further to 40% over the next ten years.
According to the Reuters report, Indian investigators have privately informed firms that bulk Scotch concentrates do not qualify for the reduction.
Instead, authorities argue these must be declared under a customs classification that carries the full 150% duty, “three people with direct knowledge of the matter” told the news agency.
Approached by Just Drinks on the Reuters report, the UK government’s department of business and trade said: “We are working with the government of India to resolve this issue to ensure UK businesses can export under the tariffs agreed in the trade deal.”
