India Detains Bulk Scotch Shipments Over Tariff Dispute

Indian customs authorities are detaining dozens of containers of bulk Scotch whisky imported by Pernod Ricard, Diageo, and Bacardi. The dispute centers on whether bulk concentrates qualify as finished products under a July 15, 2026, trade pact with the United Kingdom, which offers a reduced 75% duty, or as compound alcoholic preparations subject to a 150% tariff.

The Directorate of Revenue Intelligence issued a November 4 memo instructing customs commissioners to enforce the higher rate, arguing that imports with alcohol strengths between 62% and 66% are concentrates requiring further manufacturing. This directive contradicted a November 2 assurance from the government that the trade pact would be honored. Consequently, Pernod Ricard and Diageo each have over 40 containers held at ports, while Bacardi has five. Tax officials have also searched corporate offices and questioned executives.

On November 11, the Ministry of Commerce and Industry and the Ministry of Finance met to resolve the classification conflict. Commerce Secretary Rajesh Agarwal assured the industry that the government is working to resolve the technical issue. Industry groups have warned that the disagreement risks undermining the market-access benefits negotiated in the free trade agreement.