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Customs Holds Pernod, Diageo Scotch Shipments Over 150% Tariff Dispute
Sentiment: NeutralHigh Priority
What Happened?
Indian customs is detaining Scotch shipments from Pernod Ricard and Diageo due to a dispute over a 150% tariff. The companies argue they should benefit from lower duties under the India-UK trade pact.
Key points
- Customs is holding dozens of containers of bulk Scotch from Pernod and Diageo.
- Investigators argue that bulk Scotch concentrates do not qualify for reduced duties under the trade pact.
- The commerce ministry assured executives on November 2 that the pact would be honored.
- A memo from the finance ministry states that importers incorrectly claim benefits under the pact.
- Scotch exports to India totaled $335 million in 2024, with potential growth of $1.34 billion over five years.
- About 80% of Scotch imports from Britain arrive in bulk for local production.
Key insights
- The ongoing dispute may lead to increased costs for consumers if higher tariffs are maintained.
- Pernod and Diageo could face supply chain disruptions due to detained shipments.
- The situation highlights the complexities of international trade agreements and their implementation.
Why it matters
The tariff dispute could significantly impact Scotch imports and the broader trade relationship between India and the UK.
Entities
Pernod Ricard· CompanyDiageo· CompanyIndia· CountryUK· CountryScotch Whisky Association· Organization
Source
Business Standard
