NEW DELHI, Nov 11: A dispute over customs duty on bulk Scotch whisky imported from Britain has left more than 80 containers stranded at Indian ports, months after the India-UK free trade agreement came into force.
The dispute concerns the duty applicable to Scotch whisky imported in bulk containers. Under the trade agreement, the import duty on Scotch whisky was reduced from 150 per cent to 75 per cent. However, differences have emerged over whether the concession applies to bulk imports.
The Directorate of Revenue Intelligence (DRI) has argued that bulk Scotch whisky should be classified as a “Compound Alcoholic Preparation” rather than ordinary whisky. It has directed that the 150 per cent duty should continue to apply to such consignments.
The Commerce Ministry, however, had assured industry representatives that the duty concession under the agreement would apply to bulk Scotch imports as well. The assurance was given after a meeting with Commerce Secretary Rajesh Agrawal on November 2.
Official sources said the Commerce Ministry and the DRI, which comes under the Finance Ministry, were holding discussions to resolve the matter.
More than 40 of the held-up containers belong to Pernod Ricard and Diageo, while Bacardi has five containers stranded at ports. The companies have not agreed to clear the goods after paying 150 per cent duty.
About 80 per cent of Scotch whisky imported from Britain comes in bulk containers and is used in India for blending, processing and bottling. The dispute could affect Indian liquor manufacturers as well as foreign companies.
A UK Parliament report stated that the duty reduction under the India-UK agreement applied to Scotch whisky exported both in bottles and in bulk. Britain exported Scotch whisky worth about $335 million to India in 2024.
