Lord Offord: UK and India free trade deal would bring 'phenomenal' boost to whisky exports

·6 min read
Male cooper working in cooperage with whisky casks - Leon Harris
Male cooper working in cooperage with whisky casks - Leon Harris

A free trade deal between the UK and India would offer a bonanza for Scotland’s whisky industry, a government minister whose appointment prompted a cronyism row has said.

Lord Offord of Garvel, a banker who was last month handed a peerage allowing him to take up the Scotland Office post, vowed to work to deliver an agreement that would bring a potentially “phenomenal” boost to exports of Scotch.

Writing in The Telegraph following a visit to India, his first overseas ministerial trip, he acknowledged “criticism” of him being chosen for a ministerial role. However, he insisted his business experience would allow him to create jobs and develop new trade links in international markets.

A failed Scottish Tory candidate in May’s Holyrood elections, he was handed a seat in the House of Lords and the Scotland Office post by Boris Johnson, leapfrogging several elected MPs.

The SNP claimed the move was evidence of “rampant cronyism” within the UK Government, with Lord Offord having previously donated almost £150,000 to the Conservatives.

The peer said: “There’s been some criticism about my appointment, but I am doing what I promised I would do – using my business experience to do everything in my power to create Scottish jobs, help firms and enable trade links to flourish as we emerge from the nightmare of the Covid pandemic.

“The UK Government’s commitment to strengthening our economic relationship with India can play a huge role in this.”

Pete Wishart MP: “Handing out Ministerial jobs to party donors shows an utter contempt for democracy – and Mr Offord is clearly completely unapologetic. It is an outrage.

“If Mr Offord is serious about creating jobs in Scotland, he would do well by reflecting on the damage to Scotland’s economy being caused by Brexit. I won’t hold my breath.”

Following his visit to Delhi and Mumbai last week, alongside Foreign Secretary Liz Truss, Lord Offord said there was huge potential for improving business links with India, citing the example of Scotch.

Foreign Secretary Liz Truss visits the Red Fort, Dehli - 10 Downing Street
Foreign Secretary Liz Truss visits the Red Fort, Dehli - 10 Downing Street

While India is the world’s biggest whisky market, it is dominated by Indian brands, many of which are presented as Scottish with names such as McDowell's.

Genuine Scotch accounts for just two per cent of the Indian market, with a 150 per cent import tariff making it significantly more expensive.

Lord Offord said talks over a Free Trade Agreement with India would be launched next year, and he pledged that the UK would fight for a deal which “slashes barriers”.

The whisky industry has been pushing for years for improved access to the Indian market, which it had earmarked as its top priority to grow exports.

A UK-India trade deal would increase exports by more than £1.2 billion over five years, the Scotch Whisky Association has claimed.

“Boosting trade with India could have real benefits for Scottish food and drink exports, and our national drink offers an example of the scale of the potential,” Lord Offord said.

“The opportunity for a Scottish industry, which already employs 10,000 Scots and provides £5.5 billion in gross value added to the UK economy, could be phenomenal.”

Lord Offord of Garvel: It’s not just the whisky industry that is benefiting from trade with India

Strengthening the UK’s global trade agreements is vital to Scotland’s economic success on the world stage.

These past three days, I’ve been excited to experience first-hand the possibilities for expansion in India, identified as one of the top 20 markets for Scottish export growth.

Promoting Scotland’s trade interests in bustling Mumbai, our immense potential to export more products and services to the country became clear. From food and drink to defence and security, life sciences, education and more, we have so much to offer.

As the world’s sixth largest economy, India is a key target market for our goods and services, but currently makes up just 0.7 per cent of Scottish exports. We must build on that, and after my trip there last week, I feel confident that our ambition to double UK/India trade over the next decade will come to fruition.

I have long been passionate about helping Scottish companies succeed at home and abroad. It’s been an honour to continue that work this week in my new role with the UK Government, on my first visit as a Scotland Office Minister.

 Lord Offord of Garvel - Avalon
Lord Offord of Garvel - Avalon

There’s been some criticism about my appointment, but I am doing what I promised I would do – using my business experience to do everything in my power to create Scottish jobs, help firms and enable trade links to flourish as we emerge from the nightmare of the Covid pandemic.

The UK Government’s commitment to strengthening our economic relationship with India can play a huge role in this.

Talks to negotiate a Free Trade Agreement (FTA) will be launched this year. A broad FTA which improves the trading environment for the UK’s service providers and exporters could create thousands of jobs in both countries and we will fight for a deal which slashes barriers and improves access to India’s £2 trillion market of 1.4 billion consumers.

Boosting trade with India could have real benefits for Scottish food and drink exports, and our national drink offers an example of the scale of the potential.

According to the Scotch Whisky Association (SWA), exports of Scotch whisky to India were worth £102.3 million last year – the spirit’s third-largest market by volume.

In total, however, SWA figures show just 2.7 per cent of Scotch whisky exports went to India last year. It beggars belief, when India is the world’s biggest whisky market with annual consumption of 2.6 billion bottles, which is more than twice the total volume of Scotch whisky production.

Given that Scotch currently has a two per cent share of the Indian whisky market, the opportunity for a Scottish industry, which already employs 10,000 Scots and provides £5.5 billion in gross value added (GVA) to the UK economy, could be phenomenal.

It was fitting, then, that the SWA joined us in Mumbai, flying the flag for our distillers, alongside performers from the Royal Edinburgh Military Tattoo who shared the stage with Bollywood dancers in a showcase demonstrating the rich cross-cultural heritage of both nations.

It’s not just the whisky industry that is benefiting from trade with India. Promoting technology industries and Scotland’s defence sector was also key to my visit and I was proud to stand on board the Rosyth and Clyde-built HMS Queen Elizabeth aircraft carrier berthed off the Indian Coast, a tangible testament to Scotland’s shipbuilding expertise.

I learned about India’s P75i submarine programme, the construction of which has an estimated £1bn accessible value for UK industry. Representatives from BAE Systems, Kongsberg Maritime, Babcock and Thales – all companies with strong Scottish links and jobs – were also on the trip.

The existing strong ties between our two countries can only be strengthened by what we’ve learned. We look forward to an even more prosperous Scottish/Indian trading relationship to achieve our true potential together.

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