Scottish growers face an “alarming situation” if they face additional costs to send their goods to India.
The UK and India are engaged in negotiations to strike a trade deal in the coming weeks, which could have wider implications for the whiskey industry.
There has already been a long-standing 150% tariff on whiskey imported into India, which the UK government hopes will be reduced following any trade deal.
However, there are reports that the Indian government is now threatening to introduce a 15% tariff on 22 UK products, including whiskey and gin.
This is seen as a retaliatory measure against safeguards put in place by the UK government to protect its domestic steel industry.
The Scottish Whiskey Association said an additional 15% tariff would “undermine” progress in negotiations so far.
“The biggest market in the world”
India is the world’s largest market for whiskey and over 136 million bottles of single malt were exported to the country last year.
Scotch whiskey is only 2% of the Indian market due to the 150% tariff, which means it is significantly more expensive to buy Scotch than Indian whiskeys.
In total, 70% of the gin produced in the UK comes from Scottish distilleries, with UK gin exports exceeding £2.5 billion.
Highlands MP Drew Hendry has written to UK Trade Secretary Kemi Badenoch to express ‘deep concern’ at reports of increased tariffs on Scottish growers.
He said the only way to protect Scottish exports was “through independence and reintegration into the EU and the single market”.
“Scottish exporters are already dealing with the consequences of the pandemic, the UK’s trade war with the EU, and are barely recovering from the 25% tariffs imposed by the Trump administration,” Mr Hendry added. .
“It is therefore an alarming situation for Scottish producers if they are slapped with even more costs by a key partner like India.”
Ian McKendrick, International Director of the Scottish Whiskey Association, said: “It is disappointing to hear that the Indian government has announced that it may impose a 15% set-off duty on a range of UK products in response to the lockdown measures. British safeguards on Indian steel.
“This includes bottled Scotch whiskey in what continues to be a crucial market for our industry and our second largest for exports by volume.”
He said considerable progress had been made by both sides to improve conditions for exporters.
“An additional 15% tariff would only serve to undermine this progress,” he added.
The Department of International Trade has been approached for comment.
Already subscribed? Login
[Whisky and gin producers ‘alarm’ over India tax]