India has lowered its tariff on bourbon whiskey from 150% to 100%, a move expected to benefit imports of well-known American brands such as Suntory’s Jim Beam. The decision comes a day after US President Donald Trump criticized India’s “unfair” tariffs on American goods, particularly in the alcohol industry.

A government notification dated February 13, which gained media attention on Friday, stated that the basic customs duty on bourbon whiskey is now set at 50%, with an additional 50% levy, bringing the total to 100%. Previously, bourbon imports were subject to a steep 150% tax. However, this reduction applies only to bourbon, while tariffs on other alcoholic beverages remain unchanged at 150%.

Related News

The move is expected to primarily benefit US bourbon producers and marks a notable shift in India’s import duties on American products. Pratik Jain, a partner at PwC India, highlighted that this adjustment reflects India’s willingness to reconsider tariffs with key strategic partners, particularly in industries like spirits.

The decision comes amid ongoing concerns from global businesses regarding India’s high import duties, especially in the $35 billion spirits market. Industry leaders, including those from Diageo and Pernod Ricard, have long argued that the country’s heavy taxation on foreign liquor restricts trade and market expansion.

Vinod Giri, director general of the Brewers Association of India, described the tariff reduction on bourbon as a strategic move aimed at addressing US concerns and avoiding potential retaliatory actions. “Tariffs on bourbons, like motorbikes, have high optics value,” Giri noted, implying that the decision was intended to reassure the US of India’s commitment to fair trade.

The US remains the largest exporter of bourbon whiskey to India, accounting for approximately one-fourth of the country’s total bourbon imports.

In 2023-24, India imported bourbon whiskey worth $2.5 million. The key exporting countries included the US ($0.75 million), UAE ($0.54 million), Singapore ($0.28 million), and Italy ($0.23 million).

Trump’s reciprocal tariffs

On Thursday, Donald Trump unveiled a wide-ranging set of tariffs aimed at several major US trading partners, asserting that the measures would address unfair trade practices. He has described tariffs as a tool to generate revenue, correct trade imbalances, and push countries to respond to US concerns.