Indian customs authorities have reportedly held dozens of containers carrying bulk Scotch whisky imported by Pernod Ricard and Diageo amid a dispute over tariff concessions under the India-UK trade agreement.
According to Reuters, customs investigators are demanding 150% import duty on the shipments, while the companies maintain that the preferential 75% tariff should apply.
The disagreement centres on whether bulk Scotch concentrates qualify for reduced duties under the agreement, which took effect in July.
A confidential Directorate of Revenue Intelligence (DRI) memorandum dated Nov 4 reportedly instructed customs commissioners to apply the higher tariff to certain bulk alcoholic preparations.
Investigators argue that the reduced duty applies to finished Scotch whisky rather than concentrates requiring further manufacturing.
The memorandum reportedly states that incorrect classification could result in substantial recurring revenue losses.
Industry representatives had earlier received assurances from the Commerce Ministry on Nov 2 that the dispute would be resolved.
However, the reported customs instructions indicate that the disagreement remains unsettled.
As per the report, a senior Finance Ministry source said that the two ministries were discussing a possible resolution.
As per the report, Pernod Ricard and Diageo each have more than 40 containers awaiting clearance, while Bacardi has five.
Prolonged delays could affect supplies to India's alcoholic beverages industry, which uses imported bulk Scotch in locally manufactured products.
Approximately 80% of British Scotch imports arrive in bulk by volume, according to the report.
Scotch exports to India were valued at $335 million in 2024.
The Scotch Whisky Association has projected that the trade agreement could increase exports by $1.34 billion over five years.
Meanwhile, tax authorities have reportedly searched company offices and questioned executives as part of their investigations.
The International Spirits and Wines Association of India has warned that the dispute could undermine the market-access benefits negotiated under the trade agreement.
The unresolved disagreement highlights continuing uncertainty over the classification and taxation of imported bulk Scotch.
