India

India Confirms 75% Duty on Bulk Scotch Whisky Imports Amid Dispute

By Aryan Singh

The Indian government has confirmed that bulk shipments of Scotch whisky will qualify for the reduced 75 percent import duty, addressing concerns raised by tax officials. Commerce ministry officials reassured liquor industry executives during a closed‑door meeting on Monday that New Delhi would honour the trade agreement in both letter and spirit. One source said, "We are potentially moving towards a resolution. Bulk Scotch whisky imports are indeed part of concessions under the trade deal." A second source reported that Commerce Secretary Rajesh Agrawal told attendees that necessary steps were being taken to ensure the duty concession on bulk Scotch whisky is not impaired.

The dispute centres on the India‑UK Comprehensive Economic and Trade Agreement (CETA), which lowered the import duty on Scotch whisky from 150 percent to 75 percent when it came into effect in July 2026. Tax officials had previously told liquor companies that the reduced duty did not apply to Scotch imported in bulk containers. The disagreement is significant because about 80 percent of Scotch whisky shipped to India arrives in bulk rather than in finished bottles. These bulk imports are used by Indian manufacturers to produce Indian‑Made Foreign Liquor (IMFL) whisky by blending Scotch with other spirits and ingredients. The industry maintains that both bottled and bulk Scotch imports should qualify for the reduced tariff under the trade agreement.

The dispute has affected major liquor companies, including Diageo and Pernod Ricard, as well as Indian manufacturers Radico Khaitan and Allied Blenders and Distillers. Tax officials have searched the offices of several companies in recent days and questioned executives over the classification and eligibility of bulk Scotch imports.

The issue has also drawn attention from Britain and Scotland. The British government said it was working with New Delhi to resolve the matter, while the Scottish government separately raised concerns over the treatment of bulk Scotch imports. Scotch exports to India were valued at $335 million in 2024, and the Scotch Whisky Association projects that the trade agreement could increase exports by an additional $1.34 billion over five years.