India's government is to hold talks with drinks companies on Monday after domestic manufacturers joined multinational firms in challenging how bulk Scotch whisky imports are taxed. The row is the first major dispute under the UK-India trade agreement, which came into force in July 2026.

At the centre of the dispute

Under the agreement, duty on eligible Scotch whisky was cut from 150% to 75%, with a further fall to 40% planned over ten years. Indian investigators have, however, told major companies that bulk Scotch imports do not qualify for the lower rate. Around 80% of Scotch whisky shipped from Britain by volume arrives in bulk, for blending and bottling in India, so the interpretation matters far more than the treatment of finished bottles alone.

Why Indian firms have joined the protest

The International Spirits and Wines Association of India, which represents Pernod Ricard and Diageo, warned privately that excluding bulk imports could undermine the pact. The Confederation of Indian Alcoholic Beverage Companies has added its voice, writing to the government on 27 October. Its members include Radico Khaitan and Allied Blenders and Distillers, makers of well-known domestic brands. The group argues that denying the concession to bulk whisky would make importing finished bottles more attractive than manufacturing in India, hitting local production and jobs.

What happens next

Commerce ministry officials are expected to meet executives from Indian and multinational firms on Monday 2 November. Britain has said it is working with India on the issue, and the Scottish Government has also raised the treatment of bulk Scotch with New Delhi. Scotland's First Minister John Swinney discussed implementation of the agreement, including bulk whisky, during a visit to India that ended this week. India has not commented on the dispute, and no outcome from Monday's talks has yet been announced.