Indian tax officials visit Radico Khaitan in widening Scotch import review

Indian tax officials visited offices and a manufacturing facility of liquor maker Radico Khaitan on Tuesday as authorities widen their review of bulk Scotch imports under India’s trade agreement with the United Kingdom.

Radico Khaitan said the visits were made by the Directorate of Revenue Intelligence, or DRI, and described them as part of an industry-wide exercise. The company said officials visited two major offices and one manufacturing site, including an office in New Delhi and an office and plant in the northern state of Uttar Pradesh.

The company said the action has had no effect on its financial or operating activities.

The visits come as Indian authorities examine whether some imported Scotch products were classified in a way that allowed companies to pay lower duties. Reuters reported last week that tax officials were looking into whether Pernod Ricard and Diageo wrongly classified some bulk Scotch imports.

According to that report, the tax department is concerned that companies may have labeled some bulk Scotch concentrates as products eligible for lower tariffs under the India-U.K. trade pact. That agreement took effect on July 15 and cut import taxes on some Scotch shipments to 75% from 150%.

Radico Khaitan did not say it had been accused of wrongdoing. Its statement framed the DRI action as a broader industry review rather than a company-specific case. Based on the information released Tuesday, there was no indication that the visits had interrupted production or distribution.

The review is being closely watched across India’s beverage industry because the tariff changes affect the cost of imported Scotch and the pricing choices of companies that bottle, blend, distribute, or sell spirits in the country. If the government decides some products were placed under the wrong tariff line, importers and liquor makers could face higher costs, tax demands, or changes in sourcing plans. That could also influence competition between imported spirits and locally produced brands.

India is one of the world’s most important whisky markets, and global drinks groups have long viewed lower duties as a major opportunity. At the same time, the tariff cuts under the trade deal have created pressure on customs and tax officials to determine which products qualify for the reduced rates.

The Reuters report last week said the scrutiny centered on bulk Scotch concentrates. Those products can be used by liquor companies in different parts of the supply chain, making tariff classification especially important. A product that qualifies for a lower duty can significantly change landed cost and margins in a market where taxes remain high even after the recent reduction.

Radico Khaitan is one of India’s major spirits producers, with a portfolio that includes whisky, vodka, rum, and other alcoholic beverages. Any regulatory review involving a company of its size is likely to draw attention from investors, suppliers, and rivals, even when the company says its operations are unaffected.

The company’s statement on Tuesday was brief and did not provide details about what documents or materials officials reviewed, how long the visits lasted, or whether any notices were issued. The DRI has not publicly set out the full scope of the exercise described by Radico Khaitan.

The developments add another layer of uncertainty for companies trying to adjust to the new trade regime with Britain. The duty reduction was expected to reshape the economics of Scotch imports into India, especially for businesses using bulk shipments as part of their production or distribution model. A stricter interpretation of eligibility rules could limit some of those gains.

For now, the known facts are limited to the company’s disclosure and the broader tax review previously reported by Reuters. Radico Khaitan said the official visits were part of that wider examination and that its business continued to run normally.