No duty cuts by India on UK wines under FTA; limited concession on British beer

India is not giving any duty concessions on British wines and is providing only limited import duty benefits on UK beer under the free trade agreement (FTA) between the two countries, announced on May 6, an official said. The other sensitive agri products where India will not offer any reduction in the import duty include dairy products, apple, cheese, oats, animals and vegetable oils under the agreement with the United Kingdom. “Wine 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.

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 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 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. At present, both sides are undertaking legal scrubbing (vetting by lawyers) of the text and after that it will be signed and put in public domain.

“Maybe by August-September, the text would be made public,” another official said.

After signing, the ratification process of the FTA would take another year in the UK’s Parliament and only after that the pact would be ready for implementation.