This comes at a time when India reduced tariffs on bourbon whiskey from 150 per cent to 100 per cent in February
| Photo Credit:
istock.com
As uncertainty looms over potential US tariffs on spirituous beverages, industry leaders in India are calling for bilateral trade discussions to ensure a mutually beneficial and equitable outcome. The sector, which contributes over ₹3 lakh crore to State revenues and supports millions of livelihoods, is urging the Indian government to take necessary steps to protect its growth.
This comes at a time when India reduced tariffs on bourbon whiskey from 150 per cent to 100 per cent in February, following President Donald Trump’s criticism of the “unfair” duties in the South Asian market – a move likely to boost the import of US brands.
Anant S Iyer, Director General of Confederation of Indian Alcoholic Beverage Companies (CIABC), which represents the Indian alcoholic beverage industry, shared it is already at a disadvantage compared to manufacturers from developed countries due to high capital and operational costs, evaporation losses, and restrictive licensing regimes.
Better trade-off?
According to data from the Export Import Data Bank (EIDB) of the Ministry of Commerce & Industry,India, in FY24, imported spirits worth $23.09 million against exports of only $8.03 million. Leading IMFL producers such as Radico Khaitan, Amrut Distilleries, and Piccadilly are actively engaged in spirit exports.
Speaking to ANI, he explained that the Indian liquor industry believes US alcohol exports to India, particularly bourbon, are still at a nascent stage and smaller than imports from the UK, EU, and Australia.
While lower import duties might reduce prices, this could make Indian premium liquor less competitive. On the other hand, many Indian States impose lower taxes on imported liquor like Scotch and wines while charging higher duties on India-made spirits, making domestic brands less competitive.
“We must be the only country that tends to favour imported products rather than safeguarding the interests of Indian products. This is what even Trump is doing as far as the US is concerned. We need to protect our businesses that ensure employment and revenues to the State. Why are Indian State governments trying to be discriminatory against Indian products? It also pains us; a number of these States are ruled by the party in power, which itself is always talking about an atmanirbhar Bharat,” he said.
Non-tariff barriers
Further, India is pushing for the removal of non-tariff barriers in free trade agreements (FTAs), such as whisky definition restrictions, to ensure Indian whisky and rum are recognised globally and compete on an equal footing with US and Japanese spirits.
Alongside, Sanjit Padhi, CEO, International Spirits and Wines Association of India (ISWAI), noted that while there is no specific clarity on spirits, reciprocal tariffs may have ramifications and create challenges for both parties.
ISWAI members include global players like Bacardi, Brown Forman, Campari Group, Diageo-United Spirits, John Distilleries, Moet Hennessy, Pernod Ricard, Suntory Global, and William Grant & Sons, which account for 98 per cent of the business in India with a significant share of exports.
“Both the governments should have bilateral talks and work collectively to create a level-playing field to achieve equitable outcomes,“ said Padhi.
Iyer echoed, “We hope the government will take necessary steps to protect this sector, which contributes over ₹3 lakh crore to state revenues, employs over 20 lakh people, and sustains the livelihoods of over 50 lakh farmers in India. We have submitted our representations to the government and trust it will recognise our concerns, act fairly and ensure the vision of atmanirbhar and ‘Viksit Bharat’ is upheld.”
(With additional inputs from ANI)
Published on April 3, 2025
