New Delhi, 14 February 2025: India has lowered its tariff on bourbon whiskey from 150% to 100%, easing import costs for US brands such as Suntory’s Jim Beam.
The decision, formalized in a government notification dated February 13, surfaced in the media on Friday, coming just a day after former US President Donald Trump criticized India’s “unfair” duties on American goods, particularly alcohol.
The revised structure sets the basic customs duty at 50%, with an additional 50% levy, bringing the total tariff to 100%. Despite the cut, duties on other imported liquors remain unchanged at 150%, limiting the relief to bourbon imports alone.
The adjustment is expected to benefit US bourbon producers, reflecting a shift in India’s trade policies with key partners. “This signals India’s willingness to recalibrate tariffs with strategic allies, particularly in high-stakes sectors like spirits,” said Pratik Jain, partner at PwC India.
Strategic Shift in Trade Policy
The tariff revision follows longstanding concerns from global liquor companies over India’s high import duties.
The country’s $35 billion spirits market has drawn criticism from major industry players such as Diageo and Pernod Ricard, who argue that steep taxes on foreign liquor hinder growth and trade.
Vinod Giri, director general of the Brewers Association of India, described the move as a strategic response to US concerns, particularly as bourbon tariffs have symbolic value in trade negotiations.
“Much like motorbikes, bourbon tariffs carry high optics,” Giri said, suggesting India is signaling a commitment to fair trade while avoiding potential US retaliatory measures.
The US is the largest exporter of bourbon whiskey to India, accounting for nearly a quarter of all such imports. In 2023-24, India imported $2.5 million worth of bourbon, with the US leading at $0.75 million, followed by the UAE ($0.54 million), Singapore ($0.28 million), and Italy ($0.23 million).
Trump’s Tariff Stance Looms Over Trade Talks
Trump’s recent remarks underscore the broader tensions in US-India trade relations.
On Thursday, he announced sweeping tariffs targeting key US trading partners, justifying them as necessary to address unfair trade practices and protect American industries.
Trump has frequently used tariff threats to push policy changes, viewing them as tools to correct trade imbalances and pressure countries into addressing US concerns.
His latest statements add weight to India’s tariff adjustment, positioning it within a broader realignment of global trade strategies.
