New Delhi, May 11 — India has ruled out offering any duty concessions on British wines and will provide only limited import duty relief for UK beer under the recently concluded Free Trade Agreement (FTA) with the United Kingdom, according to a senior official.
Sensitive Agri Products Excluded from Duty Cuts
The agreement, announced on May 6, explicitly places British wine on the exclusion list, alongside several other sensitive agricultural products such as dairy items, apples, cheese, oats, and animal and vegetable oils.“Wine is on the exclusion list, along with several other agricultural products in the trade pact. We are also offering only a limited duty concession on British beer,” the official confirmed.
Impact of the FTA: Cheaper Scotch, Cars; Boost for Indian Exports
The India-UK FTA, in negotiation since 2022, promises to bring down tariffs on UK Scotch whiskey and cars, while easing access for Indian exports such as garments and leather goods to the British market.Under the agreement:
- Import duty on UK whiskey and gin will be cut from 150% to 75% immediately.
- This will further reduce to 40% over a 10-year period.
Wine Market Considerations and EU Dynamics
The exclusion of British wine is a strategic move, as the EU is a dominant player in the global wine market. Any concessions to the UK could have prompted similar demands from the EU, with whom India is also in advanced stages of FTA negotiations.India had previously granted tariff relief on premium wine imports from Australia under a trade deal effective from December 29, 2022, reducing duties from 150% to 75%.
India’s wine market is currently valued at over USD 200 million and is projected to reach USD 700 million by 2030. Imports of wine were worth about USD 25 million between April and February of FY 2024-25, compared to USD 433 million in 2023-24. Major wine sources include Australia, France, Italy, Spain, and Singapore, while UK wine imports remain minimal at just over USD one million annually.
Beer Market Insights and Duty Structure
The Indian beer market, valued at over USD 6 billion, is forecasted to grow to USD 15 billion by 2034. Although beer dominates the Indian alcohol sector, imports stand at approximately USD 10 million annually.Limited concessions on UK beer aim to balance international trade interests with domestic industry growth, which is currently fueled by changing consumer preferences, urbanisation, and higher disposable incomes.
FTA Implementation Timeline
Despite the formal conclusion of negotiations, the FTA is not expected to come into effect for another 15 months. Both countries are currently engaged in legal vetting (known as legal scrubbing) of the agreement’s text.“The text may be made public by August or September,” said another official.
Following this, the pact will undergo the ratification process in the UK Parliament, which could take up to a year before the agreement is officially implemented.
