India has reduced its tariff on bourbon whiskey from 150% to 100%, a move that is expected to benefit imports of popular US brands like Suntory's Jim Beam. This change comes a day after US President Donald Trump criticised India's "unfair" tariffs on American goods, particularly in the alcohol sector.
In a notification dated February 13 but only drawing media attention on Friday, Centre announced that the basic customs duty on bourbon whiskey would now be set at 50%, with an additional 50% levy, totaling 100%. Previously, these imports faced a hefty 150% tax. However, this reduction only applies to bourbon, with no changes to tariffs on other liquor products, which continue to be taxed at 150%.
This tariff cut will predominantly benefit US bourbon producers, marking a significant shift in India's import duties on American goods. Pratik Jain, a partner at PwC India, noted that the move signals India’s openness to revising tariffs with its strategic partner countries, particularly in sectors like spirits.
The decision comes amid broader concerns from global businesses about the high import duties in India, especially in the $35 billion spirits market. Industry leaders from companies such as Diageo and Pernod Ricard have long argued that India’s steep taxes on foreign liquor hamper growth and trade.
Vinod Giri, director general of the Brewers Association of India, acknowledged that the tariff reduction on bourbon was a strategic gesture, aimed at addressing US concerns and preventing any retaliatory measures. "Tariffs on bourbons, like motorbikes, have high optics value," Giri explained, suggesting that the move was designed to reassure the US of India's commitment to fair trade practices.
{{/usCountry}}Vinod Giri, director general of the Brewers Association of India, acknowledged that the tariff reduction on bourbon was a strategic gesture, aimed at addressing US concerns and preventing any retaliatory measures. "Tariffs on bourbons, like motorbikes, have high optics value," Giri explained, suggesting that the move was designed to reassure the US of India's commitment to fair trade practices.
{{/usCountry}}The US is the primary exporter of bourbon whiskey to India accounting for about one-fourth of all such liquor imported into India.
India has imported bourbon whiskey worth $2.5 million in 2023-24. The major exporting countries include the US ($0.75 million), UAE ($0.54 million), Singapore ($0.28 million) and Italy ($0.23 million).
Trump's reciprocal tariffs
Donald Trump on Thursday announced a broad range of tariffs targeting some of the biggest US trading partners since taking office, arguing that they would help tackle unfair practices -- and in some cases using the threats to influence policy.
The president has referred to tariffs as a way to raise revenue, remedy trade imbalances and pressure countries to act on US concerns.