PM pushes for Indian tariff cuts on UK whisky and cars ahead of visit to pave way for FTA talks

Fri 16 Apr 2021
Posted by: William Barns-Graham
Trade News


Ahead of his expected visit to India later this month, Prime Minister Boris Johnson will push the Indian government to cut tariffs on British whisky and cars.

The slashed duties would form part of an interim trade deal ahead of new negotiations for a comprehensive free trade agreement.

Double trade

The FT reports that Johnson will announce his ambition to more than double trade with India to £50bn by 2030 during his upcoming visit to New Delhi.

According to government figures, the UK-India trade relationship was worth £23 billion in 2019, supporting key industries such as technology and life sciences, as well as around half a million jobs in each economy.

Life sciences has been a priority sector in strengthening ties between both nations, with UK pharmaceuticals exports to India growing by 21.4% to £96.75m in 2019.

Reverse decline

However, a document on India trade policy from Number 10, seen by the FT, noted that over the past two decades the UK’s “share of India’s imported goods and services fell from 6% and 11% in 2000 to 1.3% and 2.1% respectively [in 2020]”.

The UK hopes to use its post-Brexit independence – through which it can negotiate its own trade deals – to rectify this decline.

Trade Secretary Liz Truss visited India in February, securing an ‘enhanced trade partnership’, which the government hopes will be a precursor to further deals in the future.

Visa issues

India’s expected demands to increase the number of visas granted to Indian workers to come to the UK has been an obstacle to deepening trade ties in the past, according to Personnel Today.

The UK’s reluctance to offer preferential treatment to Indian workers was problematic in 2007 when the EU was negotiating its own deal with India.

However, the UK’s new post-Brexit application processes for work visas are already paving the way for more Indian workers to come to the UK, meaning the issue could be less of an obstacle in future talks.

A pricey dram

Scotch whisky currently faces a 150% tariff in India, meaning Britain only has a 2% share of the 50 million bottles sold in India every year, according to the Scotch Whisky Association (SWA).

“Securing improved market access to India is the Association’s number one trade priority,” the SWA says.