India Threatens Whisky Tariff Cuts Over Britain’s Steel Plan

India said on Monday that it could revisit tariff cuts on Scotch whisky and other British products if London does not address New Delhi’s concerns over proposed steel safeguard measures, adding a new point of tension just as the two countries prepare for fresh trade talks.

The warning came from an Indian trade official ahead of a visit to New Delhi by Britain’s Trade Secretary, Peter Kyle, who is scheduled to meet Commerce Minister Piyush Goyal on Tuesday. The official said India had offered concessions under the free trade agreement signed in May last year, but those terms could be reconsidered if Britain did not make progress on the steel issue.

“So now the ball is in their court,” the official told reporters. “If they do not leverage their free trade agreement, we can always reconsider the concessions we offered.”

The dispute has emerged as both governments work to put the agreement into effect. Under the pact, India agreed to reduce tariffs on Scotch whisky from 150% to 75% at first and then to 40% over 10 years. The deal also covers a wide range of goods, including textiles and cars, and is meant to expand market access between the world’s fifth- and sixth-largest economies.

Britain’s proposed steel safeguards have become the main obstacle. India says the measures could limit access for its exporters by imposing tariff-free quotas and higher duties on some shipments. Indian officials have argued that the restrictions would undermine the spirit of the trade pact even before it fully takes effect.

India has raised its concerns at the World Trade Organization along with Brazil, Turkey, Japan, South Korea, Switzerland and Australia. The objections reflect broader unease among trading partners over Britain’s effort to protect its domestic steel industry while keeping import flows under tighter control.

The issue matters for Scotch whisky because India is one of the largest potential growth markets for imported spirits. Lower tariffs were expected to improve access for British distillers and strengthen their position against local and other imported brands. Any delay or reversal would affect pricing and competitiveness in a market where duties have long been a major barrier.

The trade agreement was expected to increase bilateral trade by an additional 25.5 billion pounds, or about $34 billion, by 2040. But implementation has slowed as Britain also moves ahead with carbon-related border measures planned for Jan. 1, 2027, covering imports such as iron and steel, aluminum, cement and fertilizers.

For now, Indian officials are signaling that concessions on whisky are tied to progress on steel. That linkage gives New Delhi leverage in talks that are meant to broaden trade ties but are now being shaped by disputes over industrial policy and market access.