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Level playing field in Scotch market

Published:  18 January, 2007

David Williamson of The Scotch Whisky Association looks at India's recent abolition of the additional customs duty on imported spirit drinks.

India's economic dynamism and an improving retail environment present increased opportunities to purchase the range of premium products, including Scotch whisky.

With the spirits market expanding at 10% a year, there is room for all distillers, both domestic and international, to grow. However, while tax reform presents new possibilities to compete on a more level playing field, the market will not be radically transformed overnight.

On this, the international evidence is clear. For example, despite much lower duties in China (10%), imported spirits represent less than 1% of the overall market.

Imported spirits are also still subject to the basic customs duty at 150%. This is much less than the inflated duty burden of up to 550% when the additional duty was applied but still very high by international standards.

The basic duty will be considered in the just launched EU-India Free Trade Agreement talks, and we hope early progress can be made to full tariff liberalisation.