United Kingdom (UK) Prime Minister (PM) Theresa May has landed in India with a 32-member delegation that is in stark contrast to her predecessor David Cameron’s delegation during his two visits in 2010 and 2013.
As part of May’s delegation is the Scotch Whisky Association represented by its head of global affairs, Sarah Dickson. The Scotch Whisky Association is a group of 60 British manufacturers of scotch which was not part of Cameron’s delegation during his two visits to India as UK’s premier. Also part of May’s delegation is Diageo represented by its chief executive, Ian Menzes.
Diageo was also part of Cameron’s delegation in 2013 but not in 2010. Diageo completed its acquisition of Vijay Mallya’s United Spirits Ltd (USL) earlier this year. Its controversial payout of around $75 million to Mallya to make him step down from USL’s board has been questioned in Indian courts.
Diageo was also part of Cameron’s delegation in 2013 but not in 2010. Diageo completed its acquisition of Vijay Mallya’s United Spirits Ltd (USL) earlier this year. Its controversial payout of around $75 million to Mallya to make him step down from USL’s board has been questioned in Indian courts.
While 60 scotch whisky manufacturers along with Diageo are part of May’s entourage, Indian IT companies which were part of Cameron’s delegation seem to be completely missing. In 2013, both Infosys and Tata Consultancy Services (TCS) were part of Cameron’s delegation.
The reasons for the absence of Indian IT companies and a profusion of scotch whisky manufacturers in May’s delegation are not hard to see.
After voting to leave the European Union in June this year, UK has further fortified its immigration laws. The British government has notified a higher minimum salary for skilled professionals being transferred by non-EU companies to work in Britain. Earlier companies could get Indian workers by paying them a minimum salary of £20800 while the new limit is set at £30000.
The new threshold is 44% higher than the previous one and is aimed at Tier 2 intra company transfer (ICT) category. UK government statistics show that 53251 workers from India were given skilled visas under various categories. According to UK’s Migration Advisory Committee, almost 48000 of these or roughly 90% were issued to Indian IT workers. The new rules also prescribe tougher English language requirements for the spouses and parents of Indian workers to stay longer in the UK.
The new threshold is 44% higher than the previous one and is aimed at Tier 2 intra company transfer (ICT) category. UK government statistics show that 53251 workers from India were given skilled visas under various categories. According to UK’s Migration Advisory Committee, almost 48000 of these or roughly 90% were issued to Indian IT workers. The new rules also prescribe tougher English language requirements for the spouses and parents of Indian workers to stay longer in the UK.
This move had raised fears that Indian IT companies would suffer under these new regulations and India’s software exports could be negatively impacted. According to National Association of Software and Services Companies (NASSCOM), UK contributes almost 20% of India’s $108 billion software exports annually. Sensing the unease among Indian techies, May has decided to skip Bengaluru. This would have been unthinkable for her predecessor.
While UK has sought to restrict skilled immigration from India, Theresa May has sought to satiate the growing appetite of Indians for scotch whisky. The Scotch Whisky Association estimated that India imported 41 million bottles of scotch whisky this year compared with 29 million last year. The value of these imports grew to £42 million from £33 million during the same period which was an increase of 28%. Indian manufacturers not just import bottles of scotch but also import barrels of alcohol to blend it with their own products. Imported alcohol attracts a duty of 150% in India which makes it prohibitively expensive. But the demand for the same is likely to grow given India’s rising middle class.
The Scotch Whisky Association includes some of the world’s well known scotch producers. It includes manufacturers like Edrington that makes blends like Cutty Sark and The Famous Grouse. It includes other distillers like Glenmorangie Company Ltd and Dewar, John & Sons Ltd that make the Glenmorangie and Aberfeldy brands of single malts respectively.
The Scotch Whisky Association has in the past attempted to keep Indian whisky out of its exclusive club. The association has claimed that any manufacturer who wishes to be part of the association needs to make its whisky from cereals. Indian whisky, according to the association, is made from molasses derived from sugarcane which makes it unqualified to make the cut. Former liquor magnate Vijay Mallya, who is now exiled in Britain, had lobbied hard to be part of this association after acquiring Whyte & Mackay in 2007.
While Theresa May might have completely excluded IT companies from her delegation, the inclusion of scotch whisky makers shows that UK is looking at India to counter the negative impact on its scotch manufacturers post Brexit. After all, Europe is its biggest market for scotch whisky. But India imposes an import duty of 150% on imported alcohol. If UK’s PM could convince PM Modi to eliminate this barrier or even reduce the duty, UK’s scotch whisky makers could raise a toast to the effectiveness of May’s whisky diplomacy.
