India’s bulk Scotch imports from Britain jumped nearly 1,000% in August after the trade pact took effect

India’s imports of Scotch whisky from the United Kingdom in large containers jumped sharply in August, while imports in smaller retail-sized packs fell, creating a split in the market just as a new trade agreement between India and Britain began to take effect.

Indian trade data reported by Moneycontrol on Tuesday, November 3, showed that imports of Scotch whisky in containers larger than two liters reached $12.39 million in August, the first full month after the India-UK trade pact came into force on July 15. That was nearly 1,000% higher than in August 2025, putting the value of those shipments at almost eleven times the level of a year earlier.

Over the same period, imports of Scotch whisky in containers of up to two liters moved in the opposite direction. Their value fell to $3.08 million in August from $4.39 million in August 2025, a drop of $1.31 million, or 29.8%.

The contrast matters because bulk Scotch is a key input for India’s liquor industry. Companies use it for blending or bottling in India, especially for whisky sold under the Indian-made foreign liquor category. That makes the tariff treatment of larger containers more than a technical customs issue. It affects how some of the country’s biggest spirits groups source product and structure their costs.

Under the trade deal, tariffs on qualifying Scotch whisky imports were cut to 75% from 150%. But a dispute quickly emerged over whether that reduction covered whisky brought in bulk, rather than only finished bottled imports. Reuters reported that Indian authorities had recently launched investigations into major liquor companies and told them that bulk Scotch imports were not eligible for the lower duty, raising concern across the industry.

On Monday, November 2, India’s commerce ministry told industry executives it was working to preserve the tariff concession for bulk Scotch, according to six people with direct knowledge of the matter cited by Reuters. At a closed-door meeting, ministry officials said India would honor the agreement with Britain in both letter and spirit, Reuters reported. One government source told the news agency that bulk Scotch imports were part of the concessions under the trade deal. Another said Commerce Secretary Rajesh Agrawal told attendees that steps were being taken so that the duty concession on bulk Scotch whisky would not be impaired.

That intervention from the commerce ministry appears to have eased some of the immediate concern in the sector, though no final customs ruling has been publicly documented. The available information does not show that the full August surge in bulk imports was caused only by the tariff cut. It does, however, show that buying patterns shifted quickly in the first complete month under the new agreement.

The issue has drawn attention because of the companies involved and the size of the market. Reuters said the recent searches and questioning by Indian tax officials affected companies including Diageo and Pernod Ricard, as well as Indian distillers such as Radico Khaitan and Allied Blenders and Distillers. The companies did not immediately respond to Reuters queries.

The disagreement centers on customs classification. Industry executives have argued that all Scotch imports from Britain should qualify for the reduced tariff under the pact, whether the whisky arrives bottled or in bulk. Tax inspectors, according to Reuters, had taken a narrower view and said the lower duty should not apply to large-container shipments. For distillers that depend on bulk Scotch as a raw material, that interpretation would sharply change the economics of the agreement.

The August trade figures underline why the classification matters. A lower duty on bulk imports can encourage companies to bring in larger shipments for local blending or bottling, while smaller bottled imports remain a different part of the market, often tied more closely to premium retail sales. The data show those two segments moving in opposite directions immediately after the agreement took effect.

The dispute also has wider trade significance. Reuters reported that Scotch exports to India stood at $335 million in 2024, and the Scotch Whisky Association has forecast that the trade pact could raise that figure by $1.34 billion over five years. After Reuters disclosed the tax investigation, Britain said it was working with India on the issue. The Scottish government also raised the treatment of bulk Scotch imports with New Delhi in recent days.

For now, the commerce ministry’s message to the industry suggests that New Delhi does not want an early tariff fight to overshadow one of its highest-profile trade deals. But the practical outcome will depend on how customs authorities apply the rules at the border and whether importers receive clear guidance that matches the ministry’s assurances.

Detailed commodity-level trade data for September, including Scotch whisky, had not yet been released as of Tuesday, November 3.