P Krishna Kumar
New Delhi, Feb 26 (.) Welcoming India’s recent trade agreements with the UK, EU and the US, the Indian Malt Whiskey Association (IMWA), the association of premium Indian malt whisky brands, has said the pacts will widen consumer choice and accelerate premiumisation in the alco-beverage segment, even as it cautioned policymakers against unfair practices and tax distortions that could hurt domestic producers.
Speaking to ., IMWA Director General, Maj Gen (Rtd.) Rajesh Chopra said most trade agreements follow a similar tariff-reduction pattern, with an immediate 50 per cent cut in basic customs duty, followed by phased reductions to around 40 per cent over seven to 10 years. However, he underlined that the overall impact on the domestic whisky market would be limited.
Chopra explained that basic customs duty currently accounts for roughly 18–20 per cent of the maximum retail price. Even if it is halved, the reduction at retail may translate to only about 7–10 per cent. And that too depends on state excise structures, duties, etc.
He added that varying excise frameworks across states, coupled with distribution margins and additional levies, make it “premature to gauge how much benefit will actually be passed on to consumers.” As far as the current volumes and share of these markets are concerned, Chopra said that US has 0.1 per cent of total whiskey volume in India, Scotch commands about 3 per cent share and Irish around 0.2 per cent.
When asked about the impact of the new import policy on Indian premium brands and products, Chopra said that Indian premium whiskies, particularly single malts, are already well entrenched in the domestic market and globally recognised and resonate strongly with local palates.
However, he felt that the new market dynamics will spur innovation and drive premiumisation. According to Chopra, Indian consumers are increasingly exploring varied whiskey styles, leading to greater demand for high-quality expressions. “Global competitiveness will push our industry towards better practices and help us stay abreast internationally,” he said, adding that Indian malts are winning accolades at global events.
While supporting trade liberalisation in principle, IMWA has flagged concerns over what it terms a “double whammy” for domestic producers. “Simultaneous reduction in customs duty along with excise concessions extended to imported liquor puts us at a disadvantage,” Chopra said.
He urged state governments to withdraw excise concessions granted to imported spirits to ensure a “fair and level playing field.” He also pointed out disparities in brand registration charges and tax structures in some states, where bottled-in-origin imports enjoy relatively favourable treatment compared to Indian-made foreign liquor (IMFL) brands.
Another area of concern is the classification of Indian whiskies in certain international markets. “They term Indian whiskies as ‘spirits’ rather than whiskey, citing maturation norms or raw material issues,” he said, describing it as discriminatory. “It should be mutually and equitably beneficial for both nations.”
Chopra further called for strict enforcement of rules of origin and vigilance against under-invoicing. “We have conveyed to the government the need to guard against under-invoicing and misuse of country-of-origin norms,” he said.
As far as IMWA is concerned, Chopra said that there definition of Indian single Malt will remain the same and would not allow to dilute it. “It has to be produced in a single distillery in India, adhering to laid-down parameters. We will not allow imported whisky to be termed as Indian single malt,” he said, describing single malts as “tariff-shielded premium products.
On future trends, he indicated that bulk imports for blending could become more attractive than bottled-in-origin imports. “Buying in bulk and blending locally may benefit producers more, as logistics costs are lower,” he said, adding that collaborations of this nature could increase in the coming years.
. KK RSA