Hopes for whisky import change

A billion bottles are drunk worldwide

Indian import restrictions on Scotch whisky will be raised by the trade and industry secretary when he visits the country this week.

Stephen Byers MP is to tour the sub-continent to promote trade and investment between the two countries.

He will make a series of speeches as well as meet the prime minister and senior members of the Indian Government.

The talks are expected to touch on access to the Indian bottled spirits market.

Whisky is important to the Scottish economy

Whisky companies have objected to India's failure to honour an agreement, reached during 1997 negotiations, to end the import ban on bottled Scotch by the end of 2000.

The Scotch Whisky Association says no proposals for the lifting of the ban have so far been put forward by the Indian officials.

The SWA, which represents 95% of the industry, also wants a reduction in the prohibitive taxation (222%) on whisky once the ban is lifted.

Tim Jackson, the SWA's international affairs director, will be part of the minister's delegation.

He said: "Stephen Byers has announced that he will be stressing the importance of world trade and the removal of trade barriers during his visit.

"Against that background, I will be asking the Indian ministers of finance and trade to explain the delay, and pressing them to ensure that India fulfils its international commitments."

'Prohibitive taxes'

Access to the Indian market is very restricted for overseas producers.

Just 360,000 cases of Scotch whisky, worth £6m and representing 0.6% of the total spirits market of 63 million cases, are permitted for sale in duty free shops and certain hotels and restaurants.

Mr Jackson said: "Repeal of the ban would be a welcome step in opening up the Indian spirits market."

But he added: "Even then, Scotch whisky will face an exorbitant tariff of 222%, making it too expensive for the average Indian drinker. We believe a tariff of 70% is more realistic.

"It would also benefit India, by eliminating the incentive for widespread contraband and counterfeit products, resulting in increased revenue for the government."