Some Indian whisky producers evoke Scottish images in their brands, a throwback to the colonial era when the Scottish originally introduced the spirit to India (Flickr).

Currently, Scottish whisky exports to India stand at only approximately 30 million British pounds, merely one percent of total Scotch whisky exports. But what makes Scotch whisky producers salivate with delight is that India is currently the world’s largest whisky consumer and hardly satiated yet. From 2000 to 2007, the Scotch whisky industry toasted to astronomical growth in sales to India, from a mere 7.5 million British pounds to 33 million British pounds, riding on the growth of the Indian economy and the burgeoning ranks of the middle class.

“India holds significant potential for fuure Scotch whisky exports and we anticipate India breaking into our top 10 export destinations in the short to medium term. Due to the historical connections, there is a strong resonance with consumers and on the part of consumers, a strong recognition of the quality of Scotch whisky,” Williamson said with delight. “Thousands of newly affluent and aspirational Indian consumers will try Scotch whisky for the first time.”

Yet to their chagrin, Scottish producers are finding their efforts to break into the Indian market impeded by domestic whisky makers. High import tariffs imposed by the government in order to protect domestic producers make Scottish whisky prohibitively expensive. Indian import substitution — an economic strategy which attempts to create growth by lowering imports and instead producing those goods locally — is a legacy of its post-independence socialist policies. What incurs the frustration of Scotch whisky makers is the level of tariffs in place.

While other countries like China and Brazil impose tariffs of 10 percent and 20 percent respectively, India until recently imposed tariffs of up to 550 percent. After the United States and the European Union complained to the World Trade Organization (WTO), ultimately agreed to lower the tariffs to 150 percent — still a formidable obstacle to would-be importers of spirits.

The trade barriers are all the more frustrating to Scottish producers given Indian’s particular links to Scotch whisky. The SWA’s Williamson noted that Indians seem to have a fine appreciation of Scotch whisky. In contrast, in China, whisky is commonly drunk   with sweet green tea: the very antithesis of  how whisky should be savored, according to the Scottish

On the other hand, V.N. Raina, director general of the All India Distiller’s Association, India’s counterpart to the SWA, objected  strongly to the tariff reduction. He explained  -via e-mail that he felt Scottish branding  regulations to be deeply unfair: “The Scotch Whisky Association and EU countries do not  allow Indian whisky to be sold as ‘whisky’ due to definition barriers created by them. Since Indian whisky is produced primarily from molasses, the EU countries insist on naming it as ‘rum’ and not whisky, citing the definition of whisky given by them as produced from ‘grains’ only.” The All India Distiller’s Association has petitioned the World Customs Organization (WCO) to create a new definitional category, “Indian whisky,” which would allow molasses-based alcohol to be sold under the umbrella of whisky.

“Molasses is in abundance here in India due to the large quantities of sugarcane grown, whereas grain is found in abundance in Western countries,” said an executive of an Indian distillery, who requested to remain anonymous. He pointed out a rich irony: “Producers of whiskies like Shaw Wallace (AW Hayward & Co.) and McDowell & Co. may now be owned and run by Indians, but these companies were actually founded by the British during the time of the British Raj. The British used molasses and yet called it whisky back then. So why are they currently rejecting molasses-based whisky?” Williamson countered: “Scotch whisky is a protected geographical indication, the formal term for Scottish-made whisky, produced according to traditional malting and distilling techniques.” It has been protected under British law since 1909, European law since 1989, and World Trade Organization law since 1994. “These laws are in place to protect consumers from deception and ensure fair competition between producers,” Williamson asserted. The Scottish industry objects to producers elsewhere using the term “whisky,” in combination with Scottish names or images such as the tartan, kilt, or bagpiper, that misleadingly invoke the reputation of Scotch whisky.

Nonetheless, Indian whisky makers stress that they should be allowed to sell Indian whisky as whisky, not rum, as quid pro quo for revising their tariffs. The Indian distillery executive emphasized: “We are more than willing to have a dialogue with the Europeans to rationalize our tax structure in order that the Europeans reciprocate and ease the qualification criteria for the sale of Indian molasses-based whisky. Globalization is a two-way street.”

To their credit, the Europeans have always allowed whisky that is made from cereals in India and complies with international standards to be sold in the European Union tariff- free. A prime example is Amrut Distilleries, which holds the distinction of being the first company to successfully launch a completely Indian-made single malt whisky in Europe.

One of the world’s leading whisky experts and author of the annual eponymous Whisky Bible, Jim Murray, said: “The level of and understanding of technology has changed worldwide in the last 10 years. The understanding was that rum, not whisky, can be brewed in hot climates. So much research has been done since that whisky production is far more greatly understood now. The Indian whisky industry produces some exceptionally good single malt whisky,” added Murray.

Coming from a connoisseur who annually tastes an astonishing 1500 new whiskies from around the world, that is indeed great praise for the nascent Indian single-malt whisky industry. He recounted that during a blind tasting session in January 2009, Amrut was a finalist and outperformed Glenlivitt and other well-known Scotch whiskies. Yet this fine brand of Indian whisky is largely unknown to most Indians, being a completely export- oriented product.

This incident has throwbacks to the clash between Old World and New World wine producers in the 1970s, when Californian wine increased in popularity and posed a challenge to the monopoly of prestigious French wines. That clash culminated in the Judgment of Paris, the wine competition where Californian wines beat French wines in a blind taste test.

Asked if whisky production would see a similar rise in competing producers around the world, Murray pointed out: “To set up a winery is not quite as expensive as a distillery.” Moreover, Murray reiterated the strength of the incumbent. “The Scotch whisky industry has huge amounts of money and therefore spends a lot on extolling the virtues of Scotch whisky. Thus, the Indian whisky industry has to fight not only the actual product but also fight the marketing army. The Indian whisky industry does not have a great international perception now,” he said.

But Indian whisky also has an advantage. Murray explained, “Indian whisky cannot really reach the age of four, as it takes on too much oak. Being fully matured at age three, Indian whiskies have a quick maturation.”

When many Indians sit down to drink whisky, the nature of the spirit is in their very lexicon. Hinglish, a portmanteau of Hindi and English, contains a fitting symbol of whisky worldwide. It incorporates the almost antiquated Anglo-Saxon word “peg” (referring to about one “shot” of alcohol) that remains widely used in India with the Hindi words chota (small) and bada (big). Evoking images of the British Raj, many Indians today continue to enjoy “chota pegs” and “bada pegs” of whisky — or what the Europeans insist should be called “rum.”

 Monish Shah is a freshman in Morse College.

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