Indian customs authorities detain dozens of imported Scotch whisky containers as investigators push for a 150% tariff, raising tensions over the India-UK trade agreement.
Indian authorities have detained dozens of containers of bulk Scotch whisky imported by global spirits companies Pernod Ricard and Diageo as a dispute over import tariffs threatens to disrupt supplies and complicate the recently implemented India-UK trade agreement.
According to a Reuters report published on November 11, India’s Directorate of Revenue Intelligence has instructed customs officials to apply a 150% import duty to bulk Scotch whisky concentrates, arguing that the shipments do not qualify for the reduced 75% tariff negotiated under the bilateral trade pact.
The trade agreement, which came into effect in July 2026, reduced tariffs on qualifying Scotch whisky imports from 150% to 75%. However, investigators argue that the concession applies to finished products, such as bottled, ready-to-drink Scotch, rather than bulk concentrates used in further manufacturing.
The disagreement has left more than 40 containers belonging to each of Pernod Ricard and Diageo stranded at Indian ports. Bacardi also reportedly has five containers being held. The companies have declined to pay the higher duty while the tariff classification remains disputed.
The development comes despite assurances from India’s Commerce Ministry on November 2 that the government would honour its commitments under the trade agreement and work towards resolving the issue.
However, a subsequent November 4 directive from the revenue authorities instructed customs officials to enforce the higher tariff, highlighting differences within the Indian government over how the agreement should be implemented.
Bulk Scotch imports are particularly important to India’s spirits industry, with approximately 80% of Scotch whisky imported from Britain arriving in large containers. These shipments are used in the production of Indian-Made Foreign Liquor, which combines Scotch with other spirits and ingredients.
The dispute could have wider economic implications for both countries. Scotch exports to India were valued at approximately $335 million in 2024, while the Scotch Whisky Association estimates that the trade agreement could increase exports by $1.34 billion over five years.
Indian tax officials have also searched the offices of several liquor companies and questioned executives as part of the investigation into the classification of imported Scotch products.
India’s finance and commerce ministries are reportedly discussing a possible resolution, although the issue remains unresolved.
The dispute represents an early test of the India-UK trade agreement, with businesses and industry representatives watching closely to see whether the negotiated tariff concessions will be applied consistently to bulk and finished Scotch whisky imports.
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