No Duty Cuts by India on UK Wines Under FTA

India and the UK on May 6 announced the conclusion of the free trade agreement, which will make British Scotch whiskey and cars cheaper in India, while reducing duties on Indian imports such as garments and leather products here. “As far as wine is concerned, it is on the exclusion list, along with several other agricultural products in the trade pact. We are also offering only a limited duty concession on British beer," the official said.

As per the agreement, India will reduce duty on UK whiskey and gin from 150 per cent to 75 per cent and further to 40 per cent in the tenth year of the deal. Not giving duty concessions to the UK on wines is significant, as the EU is a major player in this segment. Any import duty reduction to the UK would have led to pressure on India from the EU to offer similar duty cuts on its wines. Talks for an FTA between India and the European Union (EU) are at advanced stages.

Allaying concerns of Indian whiskey players, the official also said the import duty cuts granted to Scotch whiskey under the pact will not significantly impact the domestic market, as the reduction will be implemented gradually over a 10-year period and the imports are also low. Though the two countries have announced the conclusion of talks, which started in 2022, it would take over 15 months for the FTA to come into force.