India and the United Kingdom announced the conclusion of the Free Trade Agreement on May 6, which would make British Scotch whiskey and cars cheaper in India while reducing tariffs on Indian imports such as clothing and leather products.
Under the agreement, India will reduce tariffs on British whiskey and gin from 150% to 75% in the tenth year of the deal and further down to 40%.
It is important to offer tax benefits to the UK without wine, as the EU is a major player in this segment. Any reduction in import taxes on the UK will lead to pressure on the EU on India to provide similar layoffs on its wines. The FTA talks between India and the European Union (EU) are at a high level.
The official said the Indian whisky players’ concerns said that under the agreement, the import tax granted to Scotch whisky would not significantly affect the domestic market, as the reduction would be gradually implemented within 10 years and imports were low. Although the two countries announced the end of the talks that began in 2022, it will take 15 months for the FTA to take effect. Currently, both parties are conducting legal scrubbing of the text (review lawyers) and will be signed and placed in the public domain thereafter.
“Maybe by August to September, the text will be published,” another official said.
After signing, the FTA’s approval process will take another year in the UK Parliament, and the agreement will only be ready for implementation after that.
