17 March 2021 –
A reduction in BCD, it said, will adversely affect Indian Made Foreign Liquor (IMFL) brands since imports already dominate the Indian alcoholic beverages market.
Amid reports of the UK seeking massive tariff concessions on imports of scotch whiskey during ongoing free trade agreement (FTA) negotiations, liquor sector association Confederation of Indian Alcoholic Beverage Companies (CIABC) has written to the government strongly objecting to any plans to slash Basic Customs Duty (BCD).
A reduction in BCD, it said, will adversely affect Indian Made Foreign Liquor (IMFL) brands since imports already dominate the Indian alcoholic beverages market. CIABC has been part of several recent meetings hosted by the Ministry of Commerce with stakeholders before the trade talks with the UK.
“India exports just `5 crore worth of alcoholic beverages annually to the UK against an import of Rs 1,300 crore. Exports to the UK constitute only 0.2 per cent of India’s total exports of alcoholic beverages whereas imports from the UK are 24 per cent of India’s total import of alcoholic beverages,” said Vinod Giri, DG, CIABC.
Giri further noted that “restrictive” trade policies are also hampering the growth of Indian exports. “While the export of alcoholic beverages from India stood at 7.3 million cases (9 litre each) in the year 2019-20, exports to the entire EU (including the UK) were less than 30,000 cases which consisted of Indian super premium malt whiskies,” he pointed out.
CIABC said that the United Kingdom should also remove restrictions such as a minimum three years maturation period for Whiskey and Rum, since it has been scientifically established that in warm Indian conditions, spirit ages 3-3.5 times faster than in the UK. Giri added that a BCD cut would skew the balance of trade.