Indian customs holds bulk Scotch containers over 150% tariff dispute under India-UK pact

**Customs Tariff Row Hits Bulk Scotch**

Indian customs authorities are detaining dozens of containers of bulk Scotch whisky imported by Pernod Ricard and Diageo, as investigators insist on applying a 150 per cent tariff rather than the 75 per cent rate the companies believe applies under the India-UK trade pact. The agreement took effect in July 2026, and this is the first significant dispute linked to it.

Investigators argue that the reduced duty covers only finished, bottled Scotch, not bulk concentrates and compound preparations that are further processed in India. A memo from the Directorate of Revenue Intelligence, dated November 4, 2026, directs customs commissioners nationwide to maintain this position, stating that importers are incorrectly claiming pact benefits on bulk Scotch. The memo notes that such goods should attract 150 per cent duty under a classification in force since May 1 for compound alcoholic preparations, citing large-scale and recurring revenue implications. It adds that the imported goods are concentrates or compound preparations subject to further manufacturing, not finished whisky.

**Why It Matters For Business**

The dispute creates uncertainty around a key market-access benefit negotiated under the trade pact. Roughly 80 per cent of Scotch imported from Britain by volume arrives in bulk, later used to produce Indian-Made Foreign Liquor. Pernod and Diageo each have more than 40 containers held at ports, while Bacardi has five, according to sources. The companies are unwilling to pay the higher duty. Tax officials have also searched offices and questioned executives in recent weeks. The International Spirits and Wines Association of India has privately cautioned New Delhi that the standoff risks undermining the negotiated benefit in practice. For importers and compliance teams, the matter highlights the importance of correct customs classification and the potential for significant revenue demands where tariff treatment is contested.

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