Ministers warned over impact of failure to cut tariff on Scotch whisky

It is estimated that cutting the tariff could see exports of Scotch whisky to India grow by around £1bn.

Ministers warned over impact of failure to cut tariff on Scotch whisky iStock

Failure to persuade the Indian Government to slash the 150% tariff on Scotch whisky could see Scottish firms miss out on a “golden opportunity” to increase exports and jobs, UK ministers have been told.

It comes after negotiations were launched earlier this week in New Delhi between ministers from the UK and India over a free trade agreement.

The UK Government has sought to reduce the longstanding tariff, with Scotch making up just 2% currently of India’s market.

It is estimated that if the tariff is reduced, exports of Scotch whisky to India could grow by around £1bn over the next five years.

The first round of negotiations is expected to begin next week, with Prime Minister Boris Johnson having said that a trade deal with India offers “huge benefits” for businesses, workers and consumers in the UK.

However, the SNP has told the UK Government there can be “no more delaying” over the need to cut the tariff.

It follows new customs checks coming into effect from January 1 this year as part of changes brought about by Brexit.

Drew Hendry, the SNP’s international trade spokesperson, called on the UK Government to reduce the “punitive” tariff, as he warned Scotland’s key exports will always be vulnerable whilst under Westminster control.

“Ever since Boris Johnson signed his botched Brexit agreement, businesses up and down the country have faced unnecessary red tape, dodgy trade deals, skyrocketing tariffs, and all-round misery,” he said.

“Scotland’s whisky sector has faced particular hardship with sales plummeting due to increased tariffs – all of which was against the democratic will of the Scottish people. 

“There can be no more delaying from this UK government. Failure to persuade the Indian Government to slash this punitive tariff could see Scottish businesses miss out on a golden opportunity to increase exports and jobs. 

“However, for as long as Scotland leaves its key exports in the hands of Westminster, it will always be vulnerable.

“Only with independence can Scotland finally rid itself of this corrupt, outdated Westminster system, take matters into its own hands, and finally regain its EU membership.”

A Department for International Trade spokesperson indicate there has been extensive engagement with the devolved administrations and have taken into consideration their views and priorities.

They said: “India is projected to become the world’s third largest economy by 2050 and a Free Trade Agreement will open up huge opportunities for Scottish businesses to trade with India’s £2.25trn economy. 

“We are committed to securing a deal that could slash tariff barriers to the benefit of all parts of the UK, including for Scottish distilleries currently facing tariffs of 150%.

“We’ve already secured great wins for Scotch whisky producers, including the removal of 5% tariffs with Australia and the suspension of retaliatory tariffs through our resolution of the 17-year Airbus-Boeing dispute last year.” 

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