Prime Minister Boris Johnson says he wants a free trade deal with India by the end of this year.
But as he prepares to meet his Indian counterpart Narendra Modi, it’s too soon to toast the prospects of a deal that may well prove hard to agree to.
No other nation drinks as much whisky as India – which should have Scotland’s world-famous industry celebrating. But each bottle of Scotch sold in India comes with a hefty price tag attached, thanks to tariffs of 150% on imported liquor. So currently the majority of whisky drunk in India is made within its borders. Scotch whisky accounts for just 2% of the market.
Do away with those tariffs, the Scotch Whisky Association says, and exports could rise by £1bn over five years.
It’s not just whisky: India typically applies very high trade barriers – be it tariffs, quotas, or restrictions on investment – to attempts to access its markets. Foreign cars attract tariffs of up to 100% for example. As a result the UK currently sells less to India, with its vast population, than it does to Belgium.
But that could be about to change. At the start of this year, the UK and India began talks with the aim of securing a trade deal by the end of 2022. The third round (with much more likely to come) starts next week.
The UK Trade Secretary Anne-Marie Trevelyan says such a deal would be a “golden opportunity” perhaps more than doubling total trade between India and the UK by 2035, an increase of around £28bn.
Australia and the UAE have recently struck deals with India, so hopes are riding high.
