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Tax move

Indian state’s whisky duty cut fuels tariff deal hopes

Lord Offord

Lord Offord in India last month

A cut in excise duty on imported Scotch whisky by an Indian state government has been welcomed by the sector ahead of formal UK-India trade talks. 

The Maharashtra government is reducing tax from 300% to 150% of the manufacturing cost.

It has been seen as a breakthrough in long-running talks over the high taxes imposed in India.

The Scotch Whisky industry is campaigning to reduce the 150% federal tariff on imported Scotch Whisky, which the UK government has made a top priority in upcoming trade talks with Indian authorities. 

Maharashtra government officials said that the excise cut would help reduce the illicit trade of Scotch Whisky and other spirits from other states, and double state revenue from sales. 

Last month, the Scotch Whisky Association joined the UK government on a visit to Mumbai in Maharashtra to build links with state and federal officials to increase exports of Scotch Whisky to India. 

SWA international director Ian McKendrick said: “This is a step in the right direction and welcome recognition from Indian authorities that revenue can be boosted by reducing trade barriers for Scotch whisky. 

“The industry hopes that the future UK-India trade talks can build on this progress at federal level and reduce the current 150% tariff on imported Scotch Whisky.

“A phased reduction in the import tariff would unlock well over £1bn of export growth for Scotch Whisky over the first five years, and have a knock on boost to state and federal revenue in India.”

UK Government Minister for Scotland Lord Offord said: “I was delighted to visit Mumbai last month to promote trade links between Scotland and India, and see the great opportunities on offer for Scotch whisky exporters.

“This change to duty in Maharashtra is very welcome news for the industry here, and I am hopeful that the ongoing work to further reduce taxes on whisky exports to India will deliver a real boost for Scotland’s world-renowned distilleries.”

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