'Indian whisky not up to world standards due to tax structure'

The quality of Indian whisky cannot grow to globally acceptable standards, despite the annual domestic market surging to nearly 2.8 million cases primarily, due to the cost and taxation structure in the country, an industry veteran said Friday.

"The maturation cost (for whisky) is very high. If one wants to make whisky as per global standards, one has to remember two things - malt costs are very high and we don't have enough quantities of grain. The grain we (Indian distillers) use is predominantly local rice," managing director of spirit maker Kyndal Group Siddharth Banerji said here.

Global standards for whisky underline the alcoholic drink should be based on grain, mainly wheat and malt, with a minimum ageing requirement of three years in wooden barrels or caskets. The process also requires an optimal temperature between 15 - 18 degrees Celsius to narrow down evaporation.

Banerji said since the cost of procuring the malt and related ingredients of the alcoholic drink is high, it becomes cumbersome for distillers to produce the spirit.

Furthermore, Indian temperature isn't optimal for its manufacturing.

"We don't have surplus production of grain," he added.

According to Banerji, who possesses extensive experience in the liquor industry having headed different major companies, it is also expensive in India to mature the grain for three years.

"In India, you get taxed the moment you produce. So, the years you will be keeping the grain in the barrel you will be paying tax... (Indian) taxes are not designed for whisky (production)," he said.

Banerji said India accounts for 30 percent of the flavoured whisky market globally, and the domestic market is growing at a rate of 10-12 percent annually.