The Government of India has assured liquor companies that it will honour its commitments under the India-UK trade agreement and work towards resolving a dispute over import duties on Scotch whisky, Reuters reported.
The assurance follows concerns among international spirits companies after Indian authorities questioned whether bulk Scotch whisky imports qualified for tariff concessions under the bilateral agreement.
Five people with direct knowledge of the discussions told Reuters that government officials had indicated a willingness to settle the matter.
The dispute has created uncertainty for India's $65 billion liquor industry, including major international companies such as Pernod and Diageo.
The controversy centres on tariff concessions introduced under the India-UK trade agreement, which came into effect in July.
Under the agreement, import duties on eligible Scotch whisky were reduced from 150% to 75%.
However, Indian authorities recently began examining imports by major liquor companies and reportedly informed them that bulk Scotch shipments did not qualify for the reduced tariff.
The interpretation raised concerns among industry participants about the implementation of the agreement and its implications for their import operations.
During a closed-door meeting with industry representatives on Monday, government officials reportedly indicated that the tariff dispute could move towards a settlement.
One person familiar with the discussions said bulk Scotch whisky imports were covered by the concessions negotiated under the agreement.
"We are potentially moving towards a resolution," the source said as per the report.
The reported clarification could provide reassurance to companies affected by uncertainty over the applicable import duty.
However, the source did not specify when a final decision would be announced or whether the investigations would be withdrawn.
The government's assurance suggests an effort to address industry concerns while maintaining its commitments under the bilateral trade agreement.
A formal resolution has yet to be confirmed in the information available.
