Drink up: Scotch whisky should be the crowning glory of a UK-India trade deal
Even before a formal trade deal, the relationship between the UK and India was worth £25.5bn in 2019. What is known as an enhanced trade partnership – the precursor to a fully-fledged FTA – is expected to generate new jobs and unlock fresh opportunities for both countries. At the helm of closer ties between the two nations is Scotch Whisky, the full-bodied export which could reap in rewards for Britain.
The proposed partnership aims to double the value of UK-India trade by 2030 anhd slash barriers to doing business. Until recently, India slapped 150 per cent tariffs on alcohol imported into India. Even now, this still stands at a massive 50 per cent and the price for the consumer has not changed thanks to a 100 per cent cess, or tax, on all foreign alcohol.
Scotch whisky pulls in plentiful economic rewards for the UK. In 2018, Scotch whisky exports accounted for over 20 per cent of all UK food and drink exports, supporting over 40,000 jobs and adding £5bn to the UK economy every year. Even with its punishing tariffs, India is a thirsty customer. The demography of the country has continued to change with a burgeoning middle class, hungry to enjoy fine whiskies. This has firmly put whisky brands such as Lagavulin, Macallan, Ballantine’s, and Johnnie Walker on shelves in India. In 2018, India imported more than $185m from Britain.
So as we move forward to challenge the barriers between the UK and India, Scotch whisky is, in many ways, emblematic of the challenges we face and those we can overcome.
While alcohol is excluded from India’s goods and services tax (GST), Indian states levy their own excise duty on goods. This is compounded by a lack of a common regulatory framework across states and there is significant divergence in labelling, distribution, registration, licensing, excise and other tax requirements which hamper India’s ability to fully enjoy a glass of whisky. The practical effect of this is a complicated web of separate markets, difficult to navigate for even the most trade-savvy brands.
It is not only the economic benefits which make prime scotch whisky to be a centrepiece part of the trade deal. It is renowned for its brand and one of the instantly recognisable British exports. This brand, however, is protected by the geographical indication (GI) regime of intellectual property rights. This means in practice, any misuse or imitation which could mislead consumers is enforceable. While GIs are common practice in the EU, only a handful of foreign brands have managed to secure protected status in India. Scotch whisky, now, is one of them. The battle has been a long and tough one, but a critical one.
India is the sixth-largest non-EU trading partner and access to its 1.4 billion market is an incredible opportunity for Britain as it charts its post-Brexit path. Unlocking scotch whisky for UK-India trade will be pivotal in hurdling the myriad stumbling blocks between the countries. It is only one export but one which taps into both the challenges and the almost unbridled prospects of an FTA between the two nations. So, our advice to both countries is to get to work to remove barriers to trade.