In a significant trade development, India has slashed import duties on Bourbon whisky and select American wines from 150% to 100%, a decision that has been met with both applause and criticism. While the move is expected to benefit American alcohol exports, it has sparked protests from Indian whisky producers, Scotch whisky importers, and European wine suppliers, who view it as a competitive disadvantage.

The tariff reduction comes amidst ongoing global pressure, particularly from U.S. President Donald Trump, who has repeatedly criticized India’s high import duties on American products. The Indian government issued the tariff notification on February 13, 2025, just before Prime Minister Narendra Modi’s meeting with President Trump at the White House. The decision is seen as a strategic move to buy time until December, when India will enter more detailed trade negotiations with the U.S., EU, and UK on import duties across various categories.

A Long-Running Trade Battle

India’s high import duties on whisky and wine have long been a contentious issue in trade negotiations with multiple global partners, including the EU, UK, Australia, and the U.S.. While India previously reduced duties on Australian wines under a bilateral trade agreement, similar negotiations with the EU and UK have stalled for over 17 years.

The latest tariff cut follows a pattern of selective duty reductions by the Modi government. Earlier, India lowered import duties on Harley-Davidson motorcycles, a move seen as an attempt to ease pressure from Washington. However, Trump continued to voice concerns about what he calls “unfair” trade practices, urging India to open its market further to American products.

[[relatedPurchasesItems-31]]

Industry Reaction: A Divided Response

The decision has been met with mixed reactions:

American spirits brands, including Jim Beam (owned by Suntory), Wild Turkey, and Woodford Reserve, stand to benefit significantly from the reduced tariffs, which will make Bourbon more competitive in India’s premium whisky segment.

European wine and Scotch whisky importers in India have expressed discontent, arguing that the selective tariff cut favors the U.S. while keeping EU and UK products at a disadvantage.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) has called for safeguards against potential dumping of American whisky into the Indian market, stressing that any duty reduction should be implemented gradually and equitably.

“This move signals India’s willingness to make strategic tariff adjustments for key trade partners,” said Pratik Jain, Partner at PwC India, to The Hindu (an Indian news publication). “It also reassures the U.S. of India’s intent to engage in deeper trade discussions without committing to full-scale reforms immediately.”

[[relatedPurchasesItems-31]]

What’s Next?

While the tariff reduction is expected to boost U.S. exports to India’s $35 billion spirits market, it raises questions about future trade agreements with the EU and UK, both of which have been pushing for similar duty cuts. The Indian government’s next round of negotiations in December 2025 could bring broader changes to the country’s import duty structure for alcoholic beverages, potentially impacting multiple global suppliers.

For now, American whisky and wine producers have gained a competitive edge in one of the world’s fastest-growing spirits markets, but whether this will pave the way for more comprehensive trade reforms remains to be seen.

Header image sourced from Unsplash (Maker's Mark).

Also Read:
Balancing Art and Substance: Carlo Insonne Talks Innovation and Sustainability in Bartending 
Shane Faulkner on Crafting Meaningful Spirits: The Story Behind End of Days Distillery