India Slashes Bourbon Whisky Import Tax

Aakhir Tak – In Shorts

India has slashed tariffs on bourbon whisky to 100% from 150%. The move benefits imports of brands like Jim Beam. US President Donald Trump previously criticized “unfair” levies in India. The tariff reduction was notified just before Modi’s talks with Trump. Other liquor imports remain taxed at 150%.

Aakhir Tak – In Depth

India has significantly reduced import duties on bourbon whisky, a move that is expected to boost imports of popular brands such as Suntory’s Jim Beam. The decision, which lowers the tariff from 150% to 100%, comes after US President Donald Trump publicly criticized what he deemed as “unfair” levies imposed on American businesses operating in the South Asian market. The reduced tax on bourbon whisky is effective immediately.

Trump, who recently met with Indian Prime Minister Narendra Modi at the White House, has consistently voiced concerns regarding the business climate for American companies in India. He has also unveiled a roadmap for potentially imposing reciprocal tariffs on countries that levy duties on US imports, signaling a tougher stance on trade imbalances. This has increased pressure on the Indian government to take action.

The Indian government’s tariff notification, dated February 13, only gained widespread media attention on Friday. According to the notification, the basic customs duty on bourbon will be 50%, with an additional levy of 50%, bringing the total import tax to 100%. Previously, these imports were subject to a much higher tax rate of 150%. This dramatic reduction shows a clear willingness to negotiate.

It’s important to note that there will be no changes to the import duties on other types of liquor products, which will continue to be taxed at the existing rate of 150%. This suggests that the focus of the tariff reduction is specifically on bourbon whisky, likely due to the pressure from the United States and the strategic importance of the US-India trade relationship.

Pratik Jain, a partner at PwC India, believes that this move will primarily benefit imports originating from the United States. He further added that “It signals that the Indian government is willing to explore changes in tariff items for strategic partner countries,” highlighting the potential for future trade negotiations and adjustments between the two nations.

Many multinational liquor companies, including industry giants such as Diageo and Pernod Ricard, operate in India’s lucrative $35 billion spirits market. Industry executives have often voiced their concerns and criticisms regarding India’s high tariff regime for liquor imports, arguing that it hinders market growth and limits consumer access to a wider range of products.

Vinod Giri, director general at the Brewers Association of India, commented that tariffs on bourbons, similar to those on motorbikes, have a high “optics value.” He suggested that the move was strategically designed to reassure the US of India’s intentions and to pre-empt any potential retaliatory trade actions from the Trump administration.

Aakhir Tak – Key Takeaways to Remember

India slashed import duty on bourbon whisky to 100%. This move follows Trump’s criticism of “unfair” levies. The decision aims to reassure the US and pre-empt retaliation. The reduced tariff is expected to boost US imports.

Aakhir Tak Editor-in-Chief

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