India’s government will
hold talks with liquor companies on Monday after domestic firms
joined Diageo and Pernod in expressing alarm about a federal
investigation into bulk Scotch imports, according to four
sources and an industry letter.
In the first major dispute linked to a historic India-UK
trade pact implemented in July, New Delhi has told major
companies that bulk Scotch imports are not eligible for the
tariff reduction to 75 per cent from 150 per cent agreed in the deal.
The International Spirits & Wines Association of India, a
group representing Pernod and Diageo, has
privately warned New Delhi that the move to exclude bulk Scotch
imports could undermine the pact.
The Confederation of Indian Alcoholic Beverage Companies
(CIABC) has now joined the protest by flagging a hit to domestic
manufacturing, according to an October 27 confidential letter to
the government that Reuters is reporting for the first time.
Around 80 per cent of Scotch whisky imports from Britain by volume
arrive in bulk to be used to make popular brands, and India’s
$65 billion alcohol industry had hoped the cut in tariffs would
bolster business.
Top Indian commerce ministry officials will on Monday hold
closed-door talks with several senior executives of foreign and
domestic liquor companies to discuss the issue, said the four
people who have direct knowledge of the meeting.
The ministry did not immediately respond to a request for
comment outside regular business hours on Saturday.
Britain has said it is working with India on the issue, and
Scottish government has raised the treatment of bulk Scotch
with New Delhi, Reuters has reported. India has not commented on
the matter.
Whisky tariffs were a sticking point during years of
protracted negotiations on a UK-India free trade deal, though
India, a whisky-loving nation, ultimately agreed to halve taxes
on certain Scotch imports.
The CIABC’s letter said that if bulk Scotch used in Indian
manufacturing was not eligible for the lower tariff, “this could
create an unintended incentive in favour of importing finished
products.”
“Such an outcome would run counter to the objective of
strengthening domestic manufacturing under Make in India,” it
added, seeking urgent intervention to avoid disruptions.
The group’s members include listed Indian majors Radico
Khaitan, maker of the 8PM brand, and Allied Blenders
and Distillers, maker of Officer’s Choice. CIABC and
the companies did not respond to queries. All firms have said
they comply with the law.
Allied Blenders said in an investor presentation this week
it is “one of the largest bulk Scotch importers” and the UK pact
would improve its “luxury portfolio accessibility”.
Import tariff disputes have long been a sore point for
foreign investors in India who have faced demands for large
amounts of back tax. Indian officials say they are only
enforcing the law of the land.
Published on October 31, 2026
