A few weeks ago a deal was reached between the Uk and Indian Governments that would see the tariff on UK_made spirits imported into India fall from 150% to 75%, with the tariff planned to reduce further to 40% by 2035.

(For more information on this trade deal and the initial reaction within the UK, check out our previous article “Scotch Celebrates UK-India Trade Deal”.)

While UK-based trade organisations, such as the Scotch Whisky Association, welcomed the deal, the agreement has been criticised by their Indian counterparts.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) argues that the deal will negatively affect sales of premium Indian spirits domestically. Additionally CIBAC state that the trade agreement will only worsen existing tax discrimination against local producers in India.

According to CIBAC, Indian distillers face “exorbitantly high brand registration fees” when compared to Bottled in Origin (BIO) products - those being international products imported ready for sale. Therefore, premium Indian brands are struggling to compete in key domestic markets.

Indian states can set their own rates and CIBAC claim that large alcoholic-consuming states, such as Maharashtra, Delhi and Kerala, are often found to have the largest difference between the excise duty rates on BIO-goods compared to Indian spirits.

A spokesperson for CIBAC said the group have been “writing to various state governments flagging various anomalies in their excise policies which put Indian spirits manufacturers at a disadvantage compared to their foreign counterparts, which import various brands.”

Using Maharashtra as an example, a case of Amrut Fusion premium Indian single malt whisky in the state has to pay Rs 6,799 (£57.78) in duty, while Johnnie Walker Black Label is charged Rs 4,785 (£40.66).

CIABC Director General Anant S Iyer highlights how some brands simply do not even attempt to sell in certain states due to this difference in rates: “There are several premium Indian single malts, which are popular in other states and also overseas, which have stayed away from Delhi due to the exorbitant registration fee.”

The trade body fear that the UK-India pact will only make foreign imports such as Scotch whisky more affordable and available, which in turn will further harm sales Indian premium spirits.

It’s interesting, albeit slightly disheartening, to see how a trade agreement can be seen as a big win for one country’s spirits industry but is regarded as yet another hurdle for the other party’s sector.

Likewise, it’s somewhat surprising to hear that India’s premium whisky brands struggle domestically as they are starting to make a name for themselves internationally. While Indian-made budget brands such as McDowells or Officer’s Choice continue to sell well in the country (so much so that they rank among the world’s best selling in terms of total volume), their premium counterparts aren’t making a similar impact.

Hopefully organisations such as CIBAC can persuade the relevant bodies in India to show more support for their home-grown industry.