India’s government is scheduled to meet representatives of domestic and international liquor companies on November 2 to discuss growing concerns over the treatment of bulk Scotch whisky imports under the India-UK free trade agreement (FTA). The dispute, which involves major industry players including Diageo, Pernod Ricard and leading Indian manufacturers, centres on whether bulk Scotch imports qualify for the reduced customs duty agreed under the trade pact.
Under the agreement, implemented in July 2026, India agreed to reduce customs duties on eligible Scotch whisky imports from 150% to 75%. However, Indian authorities have reportedly informed major companies that bulk Scotch imported for use in domestic manufacturing will not qualify for the lower tariff. The decision has triggered objections from international liquor companies and industry associations, raising questions about the implementation of the trade agreement.
The Confederation of Indian Alcoholic Beverage Companies (CIABC), representing domestic manufacturers, has also raised concerns. In a confidential letter dated October 27, the industry body warned the government that excluding bulk Scotch from the tariff reduction could negatively affect Indian manufacturing. It argued that the move could create an unintended advantage for finished imported products over spirits manufactured in India using imported Scotch whisky, potentially undermining the government’s Make in India initiative.
Around 80% of Scotch whisky imports from Britain by volume reportedly arrive in bulk and are used in the production of popular whisky brands in India. Domestic manufacturers had expected the tariff reduction to improve access to imported Scotch and support their premium and luxury portfolios.
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The November 2 meeting is expected to bring together senior commerce ministry officials and executives from foreign and domestic liquor companies. The UK government and Scottish authorities have also raised the issue with New Delhi.
The dispute represents a significant test for the India-UK trade agreement, particularly as both countries seek to strengthen bilateral trade and investment ties.
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