India reaffirms commitment to trade deal with UK over scotch whiskey tariffs

India has officially pledged to uphold its trade agreement with the United Kingdom following a dispute regarding import tariffs on scotch whiskey. The controversy emerged shortly after the trade deal came into effect in July 2026, marking its first significant test. Indian authorities had recently initiated investigations into major industry players, including Diageo and Pernod Ricard, arguing that bulk shipments of scotch did not qualify for a tax reduction from 150% to 75% as stipulated in the agreement.

The dispute caused significant alarm within the sector, as approximately 80% of scotch whiskey exported to India is transported in bulk to be bottled locally. During a closed-door meeting held on November 2, 2026, officials from the Indian Ministry of Commerce reassured industry representatives that New Delhi intends to comply with the agreement both in letter and in spirit. This move aims to resolve the tension and clarify the tax treatment of imported spirits. No further investigations or punitive actions have been announced following these assurances, suggesting that the matter is entering a resolution phase.