The Confederation of Indian Alcoholic Beverage Companies (CIABC) has submitted a request to Union Commerce and Industry Minister Piyush Goyal to withdraw the proposal to reduce Basic Customs Duty (BCD) on alcoholic beverages imported from the United Kingdom. The body, that represents leading liquor firms, has submitted a representation which states that any reduction in BCD must be gradual to provide protection to Indian liquor companies which are already reeling from Covid-19 led market changes.
The Government of India is considering reduction in Basic Customs Duty (BCD) on alcoholic beverages as part of its negotiation with the Government of UK. Any reduction in BCD must be gradual in a controlled manner in order to provide reasonable protection to Indian companies against predatory imports, give level playing field against Western firms, and help Indian products achieve global scale and success. Not doing so will have disastrous impact on Indian industry and would lead to great loss Indian farmers and business.
CIABC added that the Indian alcohol industry was not against reduction in BCD. “Any reduction in BCD should be done in a phased manner to allow Indian companies time to prepare and build own competitiveness,” said CIABC director general Vinod Giri.
According to CIABC, India is the third largest spirits market in the world by volume. With annual revenues of Rs 4.5-lakh crore, it is also one of the largest industries within Indian economy. The industry also contributes approximately Rs 2.4-lakh crore in taxes to the governments, thus making it one of the highest tax contributors. It accounts for 20-40% of tax revenues of most state governments.
The liquor industry directly and indirectly employs about 50 lakh farmers impacting 3.5 crore people in rural India, besides employing 20 lakh people in its production and supply chain.