Customs officials in India are refusing to release bulk containers of imported scotch whisky due to a lack of clarification on whether the liquid is covered by the recent free trade agreement (FTA) between the country and the UK.
A report by Reuters yesterday (11 November) stated that “customs investigators” believe the scotch, much of which is destined to be blended with domestically-distilled whisky prior to bottling, should be liable for the pre-FTA tariff rate of 150%. The FTA, which came into effect at the start of July, reduced the tariff on imported scotch to 75% ahead of a further drop – to 40% – in 2036.
Consequently, brand owners Diageo and Pernod Ricard have had around 40 of their containers held at India’s ports, according to yesterday’s report.
While the country’s commerce ministry has pledged to resolve the matter as soon as possible, Reuters cited a “confidential government memo” from the finance ministry’s Directorate of Revenue Intelligence (DRI) as stating that “importers were “incorrectly” claiming benefits under the India-UK pact on bulk scotch”. Whisky that is shipped from Scotland in bulk is described by the directorate in the memo as “concentrates/compound preparations”, Reuters added, and therefore remains liable to the 150% tariff.
Global Drinks Intel has contacted both Diageo and Pernod Ricard for further details. The pair’s headquarters in India were both visited by DRI officials late last month, with local reports linking the attendances to duty classifications of bulk scotch imports.
The FTA between India and the UK, which had been years in the making, was agreed in May last year, prompting the Scotch Whisky Association to estimate at the time that the deal had “the potential to increase scotch whisky exports to India by GBP1bn (then-US$1.33bn) over the next five years”.
The value of scotch exports to India in full-year 2025 was GBP286m, a 15% rise on the year prior, according to figures released by the trade organisation in February.
