India has asked Britain to do away with barriers on the sale of Indian-made whisky as a high-level group of Indian and British entrepreneurs and politicians met in London on Thursday with each pushing the other for greater liberalisation in key sectors of the economy.
Commerce and Industry Minister Kamal Nath led the Indian delegation into the fourth meeting of the Joint Economic and Trade Committee (JETCO), whose discussions in London will form the basis for further business talks between the prime ministers of India and Britain when they meet in New Delhi in January.
The committee, which met at the historic Somerset House, a stone's throw from the Indian High Commission in central London, discussed a wide range of issues including reforms in infrastructure, power and legal sectors, as well as the prickly subject of Britain's visa regime for highly skilled Indian workers.
In comments made at a reception hosted by British trade minister Digby Jones on Wednesday, Kamal Nath called upon Britain to liberalise its market for Indian-made whisky.
The British market is currently regulated by strict definitions of what constitutes Scotch whisky.
The British Scotch Whisky Association (SWA) says the drink should be made from malt, but Indian manufacturers who use molasses also call their product Scotch whisky.
Nath, answering Digby Jones's call for India to bring about further cuts in import duties for British-made Scotch whisky, said Britain should respond by making it easier for Indian whisky to be sold in Britain.
"We could lower our duties, provided we could sell Indian whisky here," Nath told Digby and British business leaders, including Lord Karan Billimoria, founder of Cobra Beer and head of the Indo-British Business Partnership.
"We need to put this in order. The British set up great distilleries in India, and taught us to make whisky. Indian brands were given Scotch names - not by Indians, but by the great British distilleries, and a century later they say, 'what you make is not Scotch whisky'.
"And I say, 'we never started making it. You started making it. You called it Scotch whisky'," Nath said.
As a possible route to agreement, Nath gave the example of a recent European compromise over the definition vodka.
With some European countries insisting that real vodka is made only from grain or potatoes, the European Parliament this year approved a compromise which says vodka made from more than just grain or potatoes can still be called vodka but the other ingredients must be clearly identified on the label.
At the moment, vodka is made from a huge variety of sources, including wheat in Russia and Sweden, barley in Finland, rye and potato in Poland and sugar beet molasses and grapes in some countries.
"There are all kinds of vodka," Nath said, adding that the inability of Indian-made whisky to enter the British market "just shows the enormity of the power of the Scotch Whisky Association".
Sales of British-made Scotch whisky grew by 45 per cent this year, after India slashed import duties.