American whiskey
There is talk of concession in import duty (duty) on American whiskey and wine in the proposed trade agreement between India and America, but it is unlikely to have any major impact on domestic liquor manufacturers. Industry experts and market data show that India’s liquor market is still under the strong control of domestic companies.
Imports are limited, impact is also limited
According to a report by Times of India, the sale of American whiskey in India is very low. With total sales of about 2.29 lakh nine-litre cases, American whiskey accounts for less than 0.1% of India’s total whiskey market. In comparison, the share of Scotch whiskey is more than 3%, while Irish whiskey remains at less than 0.2%. In such a situation, there is no possibility of the market balance being disturbed due to duty reduction.
minimum import price requirement
The industry believes that even if relief is given in tariff on American liquor, a condition like Minimum Import Price will definitely be added to it. Such arrangements have already been seen in trade agreements with Australia, Europe and Britain. This eliminates to a great extent the scope for harming the domestic market by importing at cheaper rates.
Preference of taste is also a big reason
Vinod Giri, Director General, Brewers Association of India, says that the taste and color of American Bourbon and Tennessee whiskey is different from the taste of common Indian consumers. This whiskey appeals to those who like the special taste of single malt. He said that even cheap bottled American whiskey like Jim Beam has not performed well in India, which clearly shows that price is not the biggest hurdle.
Domestic hold in wine market too
Even in the wine segment, the scope of imported brands is limited. The share of wine in total alcohol consumption in India is less than 0.5%. Australian wines lead the way in imported wines, while the presence of American wines is limited. Experts say that success in the Indian wine market depends more on price or a strong distribution network than on the country.
Demand for phased duty reduction
The Confederation of Indian Alcoholic Beverages Companies (CIABC) says it is not against duty reduction, but the process should be phased. The organization is confident that the India-US trade agreement will be balanced and beneficial for both the countries. Overall, given the limited imports, specific consumer preferences and possible policy safeguards, it can be said that the duty exemption on American whiskey and wine is not likely to cause any major blow to India’s domestic liquor market.