E-Malt.com News article: India & UK: India agrees to cut tariffs on bulk Scotch whisky

India has assured drinks industry representatives that bulk Scotch whisky imports will qualify for the reduced 75% tariff under its trade agreement with Britain. The move could resolve a dispute that had raised concerns among Diageo, Pernod Ricard and domestic distillers over the treatment of whisky used in Indian-made blends, The Drinks Business reported on November 3.

The Indian government has moved to protect its trade agreement with Britain by assuring drinks industry representatives that it will apply the negotiated lower tariff rate of 75% to bulk Scotch whisky imports.

Since the agreement came into force in July, tax officials have contended that the halving of tariffs applied only to Scotch whisky bottled at origin.

Reuters reports that, at a closed-door meeting with industry executives, commerce ministry officials said New Delhi would fully honour the agreement.

“We are potentially moving towards a resolution. Bulk Scotch whisky imports are indeed part of concessions under the trade deal,” said one government source familiar with the discussions.

A second government source told Reuters that commerce secretary Rajesh Agrawal told the meeting that necessary steps were being taken to address the issue “so that the duty concession on bulk Scotch whisky is not impaired”.

Tax officials had maintained that they were applying Indian law by differentiating between bottled and bulk imports, the latter accounting for almost 80% of the Scotch entering India.

No timetable has been made public for implementing the change, and no comment has been made on whether the tariff cut will be backdated to apply to bulk imports since 15 July, the date the trade agreement came into force.

Neither the companies involved nor India’s commerce ministry has yet commented publicly on the outcome of the talks.

Bulk Scotch imports are diluted and blended into locally produced Indian-made foreign liquor (IMFL) brands to improve their quality and reputation, in a trade dominated by Pernod Ricard and Diageo.

However, major Indian players such as Radico Khaitan and Allied Blenders and Distillers had joined them in raising concerns with New Delhi.

Retail prices of imported premium bottled brands had fallen by up to 15% following the halving of their tariff rate.

Local distillers feared this would erode the price differential with their own products, putting them at a disadvantage contrary to New Delhi’s drive to promote Indian manufacturing.

In the lead-up to the talks, the local offices of both Pernod Ricard and Diageo had been visited by tax officials seeking to clarify which tariff rate had been applied to their recent shipments.

Scotch whisky exports to India were worth US$335 million in 2024, and the Scotch Whisky Association has forecast that the trade agreement could increase that figure by US$1.34 billion over five years.


04 November, 2026