India-UK Trade Pact: Spirits Duty Cut & Industry Adjustment
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CIABC states phased import duty reduction on spirits under India-UK trade pact helps industry adjust. Warns of state-level policy distortions favoring imports.
Illustration: Uttam Ghosh/Rediff.com
New Delhi, Jun 18 (PTI) The phased reduction of import duties on spirits over 10 years under the India-UK free trade agreement will help the domestic industry adjust gradually, industry body CIABC said on Thursday.
The Confederation of Indian Alcoholic Beverage Companies (CIABC) said that lower import duty on Scotch whisky will also help Indian producers using Scotch as an input for bottled-in-India products.
As per the comprehensive economic and trade agreement (CETA), to be implemented from July, India is reducing duty on UK whisky and gin from 150 per cent to 75 per cent and further to 40 per cent in the tenth year of the deal.
"The tariff reduction on imported spirits will be phased over a period of 10 years, allowing the domestic industry time to adjust. Lower import duty on Scotch whisky will also help Indian producers using Scotch as an input for bottled-in-India products," Anant S Iyer, DG, CIABC, said.
However, he said that with customs duty on imported spirits now set to reduce under CETA, it becomes essential to address the state-level policy distortions that currently favour Bottled-in-Origin (BIO) imported products over comparable Indian-made products in several markets.
In a number of states, like Delhi, Haryana, Maharashtra, Madhya Pradesh, Odisha, Assam and Kerala, BIO products already benefit from lower duties, lower brand registration fees, lower VAT/sales tax, corporation margins or greater market-access flexibility.
He added that once customs duty reduction takes effect, these state-level concessions could create a double advantage for imported products - first through reduced import duty and second through favourable local excise treatment.
Luxury Indian brands, such as Indian Single Malts, Gins, Blended Whiskies Bottled in India Scotches, continue to face a higher overall levy incidence even after considering the effective customs duty and local levy applicable on imported liquor in such states across certain price points, he said.
CIABC is the apex body of the Indian alcoholic beverage industry.
The Confederation of Indian Alcoholic Beverage Companies (CIABC) said that lower import duty on Scotch whisky will also help Indian producers using Scotch as an input for bottled-in-India products.
As per the comprehensive economic and trade agreement (CETA), to be implemented from July, India is reducing duty on UK whisky and gin from 150 per cent to 75 per cent and further to 40 per cent in the tenth year of the deal.
"The tariff reduction on imported spirits will be phased over a period of 10 years, allowing the domestic industry time to adjust. Lower import duty on Scotch whisky will also help Indian producers using Scotch as an input for bottled-in-India products," Anant S Iyer, DG, CIABC, said.
However, he said that with customs duty on imported spirits now set to reduce under CETA, it becomes essential to address the state-level policy distortions that currently favour Bottled-in-Origin (BIO) imported products over comparable Indian-made products in several markets.
In a number of states, like Delhi, Haryana, Maharashtra, Madhya Pradesh, Odisha, Assam and Kerala, BIO products already benefit from lower duties, lower brand registration fees, lower VAT/sales tax, corporation margins or greater market-access flexibility.
He added that once customs duty reduction takes effect, these state-level concessions could create a double advantage for imported products - first through reduced import duty and second through favourable local excise treatment.
Luxury Indian brands, such as Indian Single Malts, Gins, Blended Whiskies Bottled in India Scotches, continue to face a higher overall levy incidence even after considering the effective customs duty and local levy applicable on imported liquor in such states across certain price points, he said.
CIABC is the apex body of the Indian alcoholic beverage industry.
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