The Press and Journal (Inverness, Highlands, and Islands)
Industry body forecasts 1,300 new jobs if India slashed duty on whisky
Acut in basic customs duty (BCD) on sales of whisky to India could deliver a 1,300 job boost and £1.2 billion more in exports, according to the Scottish industry’s trade body.
The Scotch Whisky Association (SWA) is calling for a reduction in the current eye-watering 150% BCD on Scotch whisky to India, although even this is already a substantial drop on the previous 300% tariff.
SWA’s estimate follows hot on the heels of Prime Minister Boris Johnson’s visit to India last week which, despite being overshadowed by his partygate woes, focused on a variety of topics aimed at securing a free trade agreement FTA.
SWA chief executive Mark Kent said: “The UK-India trade talks offer a golden opportunity to reach an ambitious tariff reduction that could grow Scotch whisky exports to India by £1bn over five years.
“Tackling the tariff and state-level regulatory issues would open the market up to smaller producers who are effectively locked out by the substantial barriers to trade.
“Improved market access for Scotch would enable an increasing number of Indian consumers to enjoy our premium product.
“It would be good for Scotland, increasing jobs and investment – and the Indian government by increasing tax revenues.”
India is Scotch whisky’s second largest export market by volume, with the equivalent of more than 131 million bottles shipped to the country in 2019.
The volume of Scotch whisky exports to India has grown by more than 200% in the past decade alone.
India is the largest whisky market in the world but Scotch has just a 2% share.
SWA insists a tariff cut would result in “many more Scotch whisky companies” gaining access to the Indian market.
If the tariff was reduced and exports rose, India would overtake France as the Scotch industry’s second largest market by value worldwide, after only the US.
SWA added: “Boosting access to the Indian market would secure jobs and investment in the industry across Scotland into the future.
“The industry’s contribution to the economy would rise by more than £300 million to nearly £6bn.
“Higher exports mean higher production – there would be a significant
impact into our supply chain too, in Scotland and across the UK, also growing jobs and investment.”
SWA said bringing down the tariffs would also support Indian producers, reducing their costs and boosting employment.
This is because much of the whisky exported to India is sent in bulk – some for bottling as Scotch but most for use in Indian whisky.
SWA said it welcomed the potential for a trade deal between the UK and India. It added: “The liberalisation of the BCD must be the priority for any interim agreement as this represents the greatest opportunity for the sector.
“This must then be supported by measures
which overcome these significant market barriers and ensure the transformational potential of the talks can be fully realised in a UK-India agreement.”
Global exports of Scotch grew to £4.51bn during 2021, as the industry continued to recover from the impact of the Covid pandemic and US tariffs, according to SWA figures from February.
In 2021 the value of Scotch exports was up 19% by value, to £4.51bn.
The number of standard 70cl bottles exported also grew, by 21% to the equivalent of 1.38bn. Global growth was driven in particular by consumers in Asia Pacific and Latin America, with value
increases of 21% and 71% in these territories respectively.
Key emerging markets for Scotch – such as India, Brazil, and China – grew strongly.
Exports grew by 8% in the US. Exports to the EU grew by 8% in the first year since the UK left the bloc.
Meanwhile, William Grant & Sons said it will consult the local community after acquiring land near Portgordon for additional warehousing.
The new facilities are needed to support the growth of brands including Monkey Shoulder, Glenfiddich and The Balvenie. The land is close to a renewable energy plant owned by a subsidiary of William Grant.