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Friday, 1 March, 2002, 17:48 GMT
Scotch whisky tax cut in India
Whisky bottles
The tariff cut has been welcomed
A cut of almost 300% on the import tariff levied by the Indian Government on Scotch whisky has been warmly welcomed in the UK.

The cut was announced in the government's budget and is to take effect from 1 April.

DTI minister Douglas Alexander said he had raised the issue of "excessive" tax on Scotch at a meeting in October with Indian minister of state for commerce Rajiv Pratap Rudy.

Mr Alexander said: "The reduction announced in the Indian budget is a welcome step forward.

Whisky in a glass
Local brands have a monopoly

"This will be a boost for the Scotch whisky industry and welcome news for the Indian consumer.

"I now ask the Indian government to introduce a more transparent method for calculating tax so that Scotch whisky can compete fairly in the market with locally-produced spirits."

The Scotch Whisky Association (SWA) also welcomed the move, describing the original 700% tariff as "exorbitant".

The tariff was introduced last year, and according to Scotch whisky makers was aimed at protecting the near-monopoly of India's own spirits producers.

The effect, claimed the SWA, was to make the retail price of a bottle of Johnny Walker Black Label to the equivalent of about 53.

The SWA said the Indian Government was lowering the tariff to a maximum of 413%, and was also honouring a World Trade Organisation commitment to reduce the basic customs duty on Scotch.

Tim Jackson, SWA director of international affairs, said: "Scotch whisky will still be taxed far higher than domestic products, which is clearly in breach of WTO rules.

"Even after this tariff cut, tax will account for around 80% of the price of a bottle of Scotch Whisky, which makes it far too expensive for the average Indian consumer."

He sad a recent survey showed that because of the "prohibitive" tariff, only 10% of consumers bought Scotch through legitimate channels like shops.

See also:

28 Oct 01 | Scotland
Asian market cheers whisky producers
28 Nov 01 | Scotland
MPs seek support for whisky industry
16 Apr 01 | Scotland
Row brewing over 700% duty
12 Apr 01 | Scotland
Whisky bosses bullish over exports
07 Mar 01 | Scotland
Whisky leads mix of Budget reaction
09 Jan 01 | Scotland
Hopes for whisky import change
22 Nov 00 | Scotland
Industry plea for whisky cuts
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