Indian customs authorities have detained dozens of Scotch whisky containers from Pernod Ricard and Diageo across India. The action follows a tariff dispute over bulk Scotch imports under the India-UK trade deal. Investigators want a 150% import duty instead of the reduced 75% rate. The dispute began after the trade agreement took effect in July 2026.
The companies expected lower duties under the agreement, which provides tariff reductions for eligible British goods. However, customs investigators argue that bulk Scotch concentrates do not qualify for the reduced tariff.
They say the 75% rate applies only to finished products, including bottled Scotch. This disagreement has left several shipments waiting at Indian ports.
A confidential Finance Ministry memo dated November 4 explains the investigators' position. The Directorate of Revenue Intelligence (DRI) instructed customs commissioners to apply the higher 150% duty.
The memo classifies bulk Scotch as compound alcoholic preparations rather than finished whisky. It also warns that incorrect classification could create major revenue losses.
The development came despite an earlier assurance from the Commerce Ministry. On November 2, the ministry told industry executives that India would honor the trade agreement. A senior Finance Ministry source said both ministries were discussing a suitable solution. However, customs authorities continue to hold the shipments.
Pernod Ricard and Diageo each have more than 40 containers stuck at Indian ports. Bacardi also has five containers awaiting clearance, according to industry sources. The companies have refused to pay the higher duty while the dispute continues. Longer delays could affect whisky production and supplies across the country.
Bulk Scotch plays an important role in India's liquor industry. Around 80% of Scotch imports from Britain arrive in bulk for further production. Manufacturers use these imports to produce Indian Made Foreign Liquor by blending Scotch with other spirits. Higher import duties could increase costs for companies relying on these shipments.
Scotch exports to India reached USD 335 million in 2024. The Scotch Whisky Association expects the trade agreement to increase exports by USD 1.34 billion over five years. The International Spirits and Wines Association of India also warned about the dispute. It said the situation 'risks undermining' an important market access benefit under the agreement.
The tariff disagreement now presents a major test for the India-UK trade deal. Its resolution could determine how customs authorities treat bulk Scotch imports in the coming months.
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