After months of lobbying by Scotch manufacturers and the importers of foreign-made liquor, Maharashtra has agreed to review the 200% state duty recently levied on imported whisky and other premium spirits.
The state’s move will open up one of the largest Scotch whisky markets—Mumbai—for higher sales of Scotch.
Mumbai, along with New Delhi and Bangalore, accounts for 95% of the annual 150 million cases of Scotch whisky sold in India.
A customer at a liquor shop
“After a second round of discussion with the whisky importers’ body—International Wine and Scotch Association—on Friday, the department has sent a note to the state cabinet to take a decision in this regard,” said a senior official from the state excise department, who didn’t want to be identified.
“A cabinet decision on this is awaited soon. It could be a reversal of the duty to the earlier structure or a balanced tariff accommodating the requests from the international liquor companies,” he added.
Earlier, the state duty in Maharashtra was Rs1,800 per case. This was raised to 200% of the price of the bottle in July after the Centre waived countervailing duties on bottled imported spirits to avoid a World Trade Organization battle.
Other states, such as Uttar Pradesh, Madhya Pradesh, West Bengal and Sikkim, have also raised their duty on Scotch whisky to make it on par with the state duty on Indian-made foreign liquor. But because the new duty is based on the price of the bottle, multinational companies felt the pinch as prices of their spirits are much higher compared to the locally produced drinks.
International liquor companies are also pursuing similar campaigns with other states though Maharashtra, because of its sales, remains the focus of much of the lobbying.
India’s premium whisky market is growing at 15-20% annually in terms of sales.
An alcoholic beverages industry analyst associated with a leading foreign equity research firm, who is not allowed to be named under his firm’s policies, says the market is set to grow three-five times in five years because the consumer base for foreign-made spirits is expanding as purchasing power grows among upper and middle class society.