Campari Group (India) MD Shivam Misra
NEW DELHI: Tariff cuts on alcohol post free trade agreements (FTA) will not see a “flooding” of the Indian market by foreign brands. India has signed a number of FTAs in recent past and is going to do so with many other countries in coming months. Campari Group (India) MD Shivam Misra has told TOI, “Supply is structurally paced by scotch’s minimum three-year maturation cycle and allocations across over 180 global markets. What we are more likely to see is steady premiumisation and a clearer value ladder, not sudden distortion,” he said.Also the recent GST reforms have benefitted the industry indirectly even though alcoholic liquor for human consumption remains outside GST’s ambit. Several upstream and allied services in the value chain now carry clarified and, in many cases, concessional, rates. “For route-to-market, this translates into cleaner invoices, fewer classification disputes, and less friction in transport and multimodal logistics,” he said.
“A key foundation for these gains was laid last year, when extra neutral alcohol (ENA) used for potable spirits was excluded from GST with effect from Nov 1, 2024, preventing federal levies from being stranded as costs and directly addressing ‘tax-on-tax’ concerns, since state duties are computed on a base that otherwise included federal taxes. From a supply chain perspective, GST 2.0 reduces ambiguity on service rates, particularly transport and multimodal, while last year’s ENA decision removed a structural distortion. Together, they free up working capital and create a more predictable compliance environment,” Misra said.The India–UK FTA halves tariffs on UK-origin whisky and gin from 150% to 75% on day one, with a glide path to 40% by year 10. The framework covers both bottled-in-origin and qualifying bulk under rules of origin. Earlier this year, India had reduced the composite tariff burden on US bourbon to about 100% from 150%. “This is a measured opening that improves price transparency and broadens consumer choice, while encouraging quality upgrades (including blending where permitted) within Indian manufacturing.”With alcohol being a state subject, the VAT/excise structures are determined locally and evolve independently of GST. “Recent developments have been mixed. For instance, Maharashtra raised VAT on liquor to 10% and increased certain fees for FY26, while other states are reviewing frameworks to curb cascading and cross-border arbitrage alongside GST 2.0. Any reductions, where they occur, remain jurisdiction-specific and subject to state notifications. Where downward calibrations are introduced, they are welcome for both consumer protection and compliance predictability,” he said.So overall what has changed for the ecosystem post the GST reforms and FTA? “For consumers, there is a more transparent tax stack on upstream services and a tariff glide path that broadens access to global styles at rational price points – without incentivising excess consumption.. For the value chain, there is lower cascading and clarified logistics/job-work rates (like 5% GST with conditions on key transport modes) meaning cleaner billing, reduced frictional costs, and more efficient operations. And for ‘make in India,’ qualifying bulk under FTAs and permitted blending elevates domestic quality and strengthens premium IMFL offerings, bridging to bottled-in-origin,” he said.“The direction of travel is clear: less cascading, clearer taxation of logistics, and calibrated market access. The priority now is predictable execution at both Centre and State levels, so consumer prices reflect policy intent and the industry can reinvest in quality, safety, and responsible retail,” he added. Go to Source