Overview: A dispute has emerged over import duty applicable to Scotch whisky in India, with liquor companies seeking a reduced tariff under the India–UK trade agreement while authorities examine eligibility. The Directorate of Revenue Intelligence is investigating the classification of bulk Scotch whisky imported for blending into domestic brands following the agreement’s implementation on July 15, 2026.
The Full Story
Major liquor companies, including Diageo and Pernod Ricard, are seeking a reduced tariff of 75% for bulk whisky imports under the bilateral trade framework. Indian authorities maintain that bulk Scotch whisky concentrates used in domestic manufacturing do not qualify for the reduced duty and should continue to attract the existing 150% rate.
The Directorate of Revenue Intelligence has reportedly examined the import practices of these companies, conducting searches at company offices and questioning executives regarding the classification of bulk Scotch whisky imports. Both companies have stated they are cooperating with the investigation and complying with applicable Indian laws, though reports indicate officials scrutinized whether imported products were classified appropriately for customs purposes.
What This Means
The outcome may influence how businesses interpret and implement the tariff concessions negotiated under the India–UK trade agreement. If bulk Scotch whisky is excluded from the reduced tariff, companies using imported whisky for blending could continue to face the higher duty rate, affecting the cost structure of liquor manufacturers. The International Spirits and Wines Association of India has raised concerns that excluding bulk Scotch whisky from the reduced tariff could limit the practical benefits of the agreement for businesses importing whisky for domestic production.
Consumer Takeaway
Until the authorities reach a conclusion, the dispute remains an important test of how the reduced Scotch whisky duty will operate in practice. The investigation is expected to bring greater clarity to the treatment of bulk Scotch whisky imports under India’s customs framework and the India–UK trade agreement. The eventual outcome could affect the import costs of liquor companies, their customs compliance practices and the interpretation of preferential tariff provisions available for products sold in India.
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