Domestic AlcoBev industry raises concerns over duty cut for UK spirits under FTA deal

New Delhi, May 6 (PTI) The domestic alcohol beverage (AlcoBev) industry has raised concerns over the sharp cut in import duties on British whiskies and gin under the India-UK trade deal, saying that the government did not fully heed to its advice which may “adversely impact” the industry.

India and the UK on Tuesday sealed a landmark free trade deal, under which the Whisky and gin tariff will be halved from current 150 per cent to 75 per cent before bringing it to 40 per cent by the end of the 10th year of the deal.

Commenting on the development, the Confederation of Indian Alcoholic Beverages Company (CIABC) said: "Though FTA details are still awaited, from what information we have gathered it seems that the Government has not fully heeded to the pleas of the Indian alcoholic beverage industry.” The CIABC, which represents the domestic AlcoBev players, expressed fear that if a similar structure is followed by the government in its ongoing trade negotiations with the US and other countries, then it could adversely impact the local industry.

“We fear that if the same template of duty reduction is followed for the trade deals with the EU, the US and other nations which produce spirits and wines, then the Indian Alcobev industry, including the wine sector, could get adversely impacted,” said CIABC Director General A S Iyer.

However, the International Spirits and Wines Association of India (ISWAI), which represents foreign AlcoBev companies welcomed it terming it a win-win situation for the countries, providing a “significant strategic benefit “ and attracting investments.

“The reduction in tariffs offers significant strategic benefits for both countries. India’s increasingly aspirational and discerning consumers will now have access to premium international brands at more accessible prices,” said ISWAI CEO Sanjit Padhi.

This will further accelerate the ongoing trend of premiumization within the AlcoBev sector, positively impacting the exchequer revenues of Indian states, said ISWAI. “We see this agreement as a win-win for all stakeholders in the spirits sector whilst fueling trade, attracting investment, and fostering the exchange of best practices,” said Padhi. PTI KRH MR