# Government Reassures Liquor Industry on Scotch Import Duty Commitments Officials promise amicable resolution regarding customs classification disputes for bulk Scotch whisky imports. - **Source:** [mint - companies](https://www.livemint.com/rss/companies) - **Published:** 2026-11-02 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/63712f6c-35d8-48c1-ad10-a267045dc074 ## Government Commitment to FTA The Indian government has assured domestic liquor manufacturers that it will honor commitments under the India-UK Free Trade Agreement. This follows a meeting between the Union commerce secretary and industry bodies, including ISWAI and CIABC. The assurance aims to resolve ongoing ambiguity regarding the customs classification of bulk Scotch whisky imports. ## Customs Classification Dispute The core conflict involves the Harmonized System of Nomenclature code applied to bulk Scotch. While the FTA reduced duties from 150% to 75%, tax authorities are investigating if bulk imports require a higher duty classification. Industry players argue that bulk Scotch should retain the lower rate regardless of shipping method. ## Impact on Domestic Bottling Industry leaders warn that excluding bulk imports from duty concessions could undermine the Make in India initiative. Currently, 80% of Scotch imported into India arrives in bulk for local bottling. If higher duties are applied, it may become cheaper to import fully bottled spirits, potentially harming local manufacturing facilities and operations. ## Corporate Margin Performance Several major players, including United Spirits and Allied Blenders, reported that lower import duties have already begun supporting gross margins. Allied Blenders estimated a 70-basis-point benefit for FY27. However, some companies like Tilaknagar Industries noted no immediate impact in the September quarter due to existing inventory levels and timing. ## Regulatory Scrutiny Intensifies The Directorate of Revenue Intelligence has challenged the current classification, suggesting bulk concentrates should face the higher 150% duty. This has led to searches at multiple corporate locations in October. Companies maintain they have used the same HSN codes for 10 to 20 years without prior issues or changes to materials. ## Market Growth Projections India's whisky consumption reached 268.8 million nine-litre cases in 2025, reflecting a 3.7% growth rate. Scotch whisky specifically grew by 5.3% to 9 million cases. Projections indicate Scotch will maintain a 5.4% CAGR through 2030, outpacing the 3.6% growth rate expected for the broader whisky market in the country. ## Operational Continuity Concerns Industry representatives emphasize the need for an early resolution to ensure business continuity. Executives like Anant S. Iyer of CIABC expressed confidence that the government will balance FTA obligations with the interests of the domestic industry. Companies remain focused on maintaining their current supply chains while awaiting formal clarification from the ministry. ## Strategic Implications for Brands The resolution of this dispute is critical for the long-term pricing strategy of imported Scotch in India. With 10 million cases of Scotch bottled in India or origin annually, the classification outcome directly influences market competitiveness. Companies are closely monitoring the situation to protect their margins and sustain current growth trajectories. ## Sources covering this story - https://www.livemint.com/companies/news/govt-to-honour-uk-fta-commitments-on-bulk-scotch-imports-assures-liquor-makers-industry-body-11793612116619.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._