India Cuts Bourbon Whisky Tariffs Following Trump’s Remarks

In an official notification issued on February 13, the central government announced the decision to reduce tariffs on bourbon whisky to 100 per cent from 150 per cent. Under the revised structure, bourbon will now be subjected to a basic customs duty of 50 per cent on bourbon, along with an additional 50 per cent levy.

However, this reduction exclusively applies to bourbon whiskey, while tariffs on other liquor products remain unchanged at a substantial 150 per cent.

Trump's Criticism Of India's Tariffs

The announcement comes as United States President Donald Trump criticised recently about India's "very unfair and strong" tariffs on American products, especially in the alcoholic beverages sector. He referred to the South Asian country as the "tariff king", emphasizing the need for a more balanced US-India trade relationship.

"Whatever India charges, we charge them," Trump said at a joint news conference with Prime Minister Narendra Modi. "So, frankly, it no longer matters to us that much what they charge."

Several international liquor giants such as Diageo and Pernod Ricard have a significant presence in India's $35 billion spirits market. Industry leaders have consistently expressed concerns over India's steep tax rates on imported liquor, which they argue hinder market growth.

India's Bourbon Whiskey Import

In the fiscal year 2023-24, India imported bourbon whisky worth $2.5 million. The major exporting countries included:

• United States - $0.75 million
• UAE - $0.54 million
• Singapore - $0.28 million
• Italy - $0.23 million

India's overall alcoholic beverage imports surged to $1 billion in 2023, marking a 74 per cent year-on-year increase. Distilled spirits dominated with a 56 per cent market share, while U.S. origin alcohol exports to India rose 32 per cent to $20.5 million, according to a report by the U.S. Department of Agriculture's Foreign Agricultural Service.
Despite India's high import tariffs, varying state excise regulations, and marketing restrictions, the liquor industry continues to experience substantial growth, the report added. The sector is expected to expand to $55 billion by 2027, fuelled by increasing demand, a rising middle-class, and growing premiumization trends. Additionally, India's low per capita alcohol consumption leaves significant room for expansion.

India's Alcohol Exports and Growth Initiatives

India's alcoholic beverage exports are expected to witness substantial growth in the upcoming years, driven by rising global demand and government initiatives. The market is projected to expand by up to 20 per cent, creating new opportunities for Indian liquor brands in international markets.

To further boost alcohol exports, the Indian government is actively supporting the industry through initiatives such as participation in global trade fairs and enhancing market access for Indian products. The Agricultural & Processed Food Products Export Development Authority (APEDA) is also working to promote Indian liquor exports, aiming to increase the country's presence in the global alcoholic beverages market.