Whitehall is rattled. Sources tell me the Department for Business and Trade has convened emergency talks. The cause? India’s booming ‘blue gold’ sector. That’s the new term for premium Indian spirits, particularly gin and whisky. They’re competing directly with British exports. And they’re winning.
Let me give you the numbers. Indian gin exports have surged 400% in the last three years. British gin exports to India? Flat. Actually, down 12% in Q1 alone. The trade deficit in spirits is widening. Fast.
I’ve spoken to a senior cabinet source. They used the phrase “strategic response.” Translation: panic. The Prime Minister’s trade envoy has been recalled from Delhi. Meetings are happening behind closed doors this afternoon.
Here’s the inside track. The problem isn’t just competition. It’s tariffs. India slaps a 150% duty on imported spirits. British brands can’t compete on price. Meanwhile, Indian producers use local botanicals, cheap labour, and government subsidies. Their ‘blue gold’ is flooding markets in the Caribbean, Africa, and even Europe.
But there’s a political dimension. The India-UK free trade agreement is stalled. Negotiators have been arguing over market access for years. Now Labour backbenchers are demanding action. They want retaliatory tariffs on Indian textiles. The Treasury is pushing back. They say it would hurt consumers.
One MP told me: “We’re being outmanoeuvred. They’ve built a premium brand from nothing. Our response is a damp squib.”
What will happen? I’m told the government is considering a three-pronged plan. First, a marketing blitz for British spirits in India. Second, a challenge at the WTO. Third, investment in British distilleries to boost exports.
But the real game is about perception. ‘Blue gold’ is a wedge issue. It’s being used by Brexiteers to argue that global Britain isn’t working. They point to stagnant exports. They say the India trade deal is a failure.
One No. 10 insider whispered: “The PM needs a win. This could be a narrative shift. Or it could be another own goal.”
Watch this space. I’ll have more on the cabinet split this evening.
