Ever wondered why authentic Scotch whisky is so expensive in India? Have you sat at a bar and asked why in god’s name a glass of good alcohol costs that much? If the answer is yes then you have stumbled across an illustration of India’s peculiar trade relationship with Great Britain. It is a relationship set to become even more bizarre, thanks to British politics.
Every year Indians consume more whisky than any other country in the world. Yet the Indian government imposes a 150% tariff on Scotch whisky, far higher than most products imported from Britain, which on an average have a 15% import tax.
We don’t know exactly why whisky connoisseurs in India are punished — a mixture of anti-alcohol morality and lobbying from local producers are usually blamed — but we do know Britain is desperate to change the situation. This haggling over the price of whisky illustrates something bigger: An attempt by Britain to find a new place in the world.
A fortnight ago the British chancellor and business secretary both flew over to try and set the stage for a big trade deal with India. Trade secretary Liam Fox has also been doing the rounds. And these visits come after British Prime Minister Theresa May herself came to meet Prime Minister Narendra Modi in November. So why are British politicians suddenly so interested in trade with India? It’s because of the state of British politics.
The cold reality is that with Britain poised to leave the European Union, its government is desperate to show that Brexit can be a success. This is no longer about national survival. For the pro-Brexit figures who have conducted a hostile takeover of the government, this is a matter of personal pride. If Brexit fails, then so do their political dreams. So they have created an alternative reality in which Britain will recapture its former glory by trading aggressively across the world. Such is their arrogance that some in government have dubbed the project “Empire 2.0”.
This is why, for Britain’s Brexiteers, a big trade deal with one of the world’s largest economies would be hailed as a victory. But what they haven’t done is to tell their supporters that trade deals usually involve giving up something in return. As Boris Johnson, secretary of state for foreign and commonwealth affairs, recently told a newspaper: “Our policy is having our cake and eating it.” They want Indian money, but not Indians themselves.
Let’s be clear: There is little doubt that India would benefit from more trade with Britain. It would reduce prices of manufactured goods and food in both countries. It would also create new jobs and investment. Besides, Britain’s citizens of Indian origin have also long worked hard to forge a closer relationship between the two countries. There is a strong case for Britain’s tilt to India.
But it would be a betrayal for Indians if their government did not make their own demands for a trade deal. India needs easier visa access for its business community, for scientists, engineers and doctors travelling to the UK. It needs to ask why the British home office threatened Indian students with detention and deportation in claiming they had fraudulently completed English language tests (which they hadn’t). The number of Indian students going to Britain for higher education has fallen dramatically in the last few years.
And last but not least, New Delhi should ask why London has consistently made it harder for Indians to visit or join family members in Britain. The wellbeing of Indians abroad should matter much more to the Centre, given their outsized contribution to the Indian economy.
Indian ministers should point out that what the British government craves from Brexit is highly contradictory. One side wants global trade and economic growth, the other wants a closed economy with little immigration. The two are mutually exclusive. Britain cannot reap all the benefits from globalisation without the difficulties that come with it. They are two sides of the same coin. So far its ministers are sailing through by steadfastly ignoring reality, but they can only do that for so long.
International trade can be a bit like drinking alcohol: What you want from is not always what you get. It has its benefits but can also be hazardous to your health. Five years ago, during trade negotiations with the EU (which are still ongoing, by the way), New Delhi suggested reducing import duty on spirits in return for easier access for visas and Indian goods. But little progress has been made. It’s not just whisky drinkers but workers everywhere who are losing out.
Source: Hindustan Times, April 15, 2017