With the proposed India-United Kingdom (UK) free-trade agreement (FTA) in the last leg of discussions, Indian negotiators have proposed to allow Scotch whisky import in both barrels and bottles, but will bargain hard on mobility and migration related issues, two officials part of the negotiation team said.
The 14th and final round of discussions for the India-UK FTA, which started on 10 January, is still on and India is hoping that FTA will fructify with positive commitments, the first official said.
India and the UK have held 14 rounds of negotiations for the FTA, and both sides are keen to conclude the agreement soon. A delegation of high-ranking officials from the UK arrived in India on 22 January to discuss remaining aspects of the free-trade agreement negotiations between the two countries.
However, on the issue, a British High Commission spokesperson said, “The UK and India continue to work towards an ambitious trade deal.”
“While we do not comment on the details of live negotiations, we continue to actively engage with India and are clear that we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy,” the British High Commission spokesperson added.
“The issue of liquor import is under consideration stage. We have proposed import of spirits in both bottles and barrels,” the second official said. “We are also hoping FTA’s terms of reference on similar lines in the matters related to mobility and migration,” the second official added.
A majority of the issues in the proposed FTA between India and the UK are either finalized or at an advanced stage of talks.
“The FTAs are on the right track. There are some issues with mobility, but we have put a strong stand on it. Indians should get ‘full mobility’ for doing businesses in the UK,” the first official said.
On the visa issue, the second official said, “We have proposed for granting relaxations in the visa regime and make it in favour of Indian service companies operating in the UK under FTA provisions, so that Indian firms should be able to hire manpower easily.”
“The FTA will become a tool of facilitation for both nations. Wait till February-end, there will be a positive development in India-UK FTA,” the official said.
The UK’s delegation of about a dozen members are negotiating to resolve the sticky issues in the final deliberations.
On the liquor import issue, Vinod Giri, who heads Confederation of Indian Alcoholic Beverage Companies (CIABC), said, “Our demand is very simple. We want the government to propose a tax reduction on bottled liquor from current 150% to 100% now and then to 50% over a period of 10 years. This offer is progressive, fair and will ensure the domestic industry is not unduly impacted. We also acknowledge that whisky imported in bulk is also used as a raw material and hence are fine with more concessions on it by reducing duty to 75% now and then to 25% over 10 years.”
“The other pertinent issue that we have raised is removal of the maturation condition of 3 years for a spirit to be called whisky in the UK. In warm Indian weather conditions, whisky matures 3-5 times faster than in cold Scotland. It also evaporates 10-15% every year during maturation in hot India and so in 3 years more than one-third of the whisky is lost which would make Indian products just uncompetitive. If this condition is not removed the deal would be one sided with no gain to Indian industry,” Giri said.
In terms of sales’ value for Scotch whisky, India stands at fifth position in the world. As per industry data, sales of Scotch whisky in India increased by 93% to $340 million in 2022. Scotch, however, accounts for just 2% of all whiskies consumed in India. The overall whisky market in the country is expected to cross $22 billion by 2027.
The mobility issue has become a bone of contention for UK as ending free movement of people and taking back control of its borders were key factors leading to Brexit in 2016.
