Indian Government to Hold Talks with Liquor Firms Over Bulk Scotch Import Investigation

India’s government will hold talks with liquor companies on Monday following a federal investigation into bulk Scotch imports. The discussions come after both domestic firms and major foreign players expressed alarm over the regulatory scrutiny.

In the first major dispute linked to the India-UK trade pact implemented in July, New Delhi has communicated to major companies that bulk Scotch imports are not eligible for the tariff reduction from 150 percent to 75 percent agreed upon in the trade deal. Around 80 percent of Scotch whisky imports from Britain by volume arrive in bulk to manufacture popular brands within India's $65 billion alcohol industry.

The International Spirits & Wines Association of India, representing global firms Diageo and Pernod Ricard, privately warned New Delhi that excluding bulk imports could undermine the trade agreement. Subsequently, the Confederation of Indian Alcoholic Beverage Companies (CIABC) joined the protest, highlighting potential risks to domestic manufacturing in an October 27 confidential letter.

CIABC members include listed Indian majors such as Radico Khaitan, maker of the 8PM brand, and Allied Blenders and Distillers, maker of Officer’s Choice. In its letter, the CIABC noted that if bulk Scotch used in Indian manufacturing remains ineligible for the lower tariff, it could create an unintended incentive favoring the import of finished products over domestic production, running counter to the objectives of the Make in India initiative.

Allied Blenders stated in a recent investor presentation that it is one of the largest bulk Scotch importers and that the UK pact would improve accessibility for its luxury portfolio. All companies involved have maintained that they comply with the law.

Top Indian commerce ministry officials will meet with senior executives from both foreign and domestic liquor companies on Monday in closed-door sessions to address the dispute. While the commerce ministry did not immediately respond to requests for comment, Britain has indicated it is working with India on the issue, and the Scottish government has also raised the matter with New Delhi.

"Tariff implementation and trade pacts require clear operational frameworks to ensure that regulatory enforcement aligns with broader economic goals. When policies create discrepancies between bulk imports and finished goods, it impacts local manufacturing strategies and supply chain economics. For businesses operating in regulated sectors like alcohol and beverages, proactive dialogue with government bodies is essential to resolve compliance ambiguities and safeguard domestic investments." — Dr. Shishir Gupta, Founder & CEO, StartupLanes