Trade body the Scotch Whisky Association (SWA) has welcomed a 50% import tax cut for the category in Maharashtra, India.
The Maharashtra government has slashed excise duty on Scotch whisky imported to the Indian state from 300% to 150% of the production cost.
The sector has long campaigned to reduce the 150% federal tariff on imported Scotch whisky, which the UK government said it would prioritise in upcoming trade talks with Indian authorities.
Maharashtra government officials said the reduction would help reduce illegal trading of Scotch whisky and other spirits from other states, and double state revenue from sales.
Ian McKendrick, SWA international director, said: “This is a step in the right direction and 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 [US$1.33bn] of export growth for Scotch whisky over the first five years, and have a knock on boost to state and federal revenue in India.”
In October, the SWA joined the UK government on a visit to Mumbai in Maharashtra to build connections with state and federal officials to increase whisky exports to India.
Malcolm Offord, UK government minister for Scotland, added: “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.”