By Scott Wright

SCOTCH whisky distillers have been buoyed by the reduction of a punitive import tariff in one of the biggest states in India.

The excise duty on imported Scotch whisky to Maharashtra, the second-most populous state in India, has been cut by 50 per cent in a move local officials said will reduce the illicit trade in Scotch and double state revenue from sales. It reduces the tariff on Scotch imported to the state from 300% to 150% of the manufacturing cost.

The move comes before the UK is due to open talks with India over a trade deal. The Scotch Whisky Association is campaigning to reduce the 150% federal tariff on imported Scotch to India and said the UK Government will make this a top priority in negotiations with the Indian authorities.

Ian McKendrick, international director of the SWA, said: “This is a step in the right direction and we welcome recognition from Indian authorities that revenue can be boosted by reducing trade barriers for Scotch whisky. The industry hopes that the future UK-India trade talks can build on this progress at federal level and reduce the current 150% tariff on imported Scotch whisky. A phased reduction in the import tariff would unlock well over £1 billion of export growth for Scotch whisky over the first five years, and have a knock-on boost to state and federal revenue in India.”

Figures released by the SWA in August showed Scotch whisky exports to India were worth £67.6 million in the first six months of this year.

Lord Offord, UK Government Minister for Scotland, said: “I was delighted to visit Mumbai last month to promote trade links between Scotland and India, and see the great opportunities on offer for Scotch whisky exporters.

“This change to duty in Maharashtra is very welcome news for the industry here, and I am hopeful that the ongoing work to further reduce taxes on whisky exports to India will deliver a real boost for Scotland’s world-renowned distilleries.”