India’s Directorate of Revenue Intelligence opened a probe into Pernod Ricard and Diageo’s bulk Scotch whisky imports for alleged misclassification to secure the 75% tariff reduction under the India‑UK trade pact. Inspectors visited Pernod Ricard’s India headquarters near New Delhi on Thursday, interrogating executives and reviewing import documents, while United Spirits’ offices in multiple cities were searched Friday as part of an “industry‑wide exercise”. Pernod Ricard said it was fully cooperating and had already supplied all requested data, and United Spirits confirmed the same in a stock‑exchange filing.
The trade pact, effective July 15, cut duties on certain Scotch products from 150% to 75%, with a planned drop to 40% over the next decade. The lower rates have already prompted price cuts of roughly 10‑15% for flagship brands such as Johnnie Walker Black Label, J&B, Chivas, Ballantine’s and The Glenlivet in states like Maharashtra and Rajasthan. The UK government noted in July that “iconic UK products” would benefit from the tariff cuts, citing that whisky exports to India exceeded £200 million in 2022.
This investigation follows a long history of tax disputes between foreign firms and Indian authorities over classification and tariff payments. Earlier cases involved Samsung, LG and Volkswagen, where authorities later demanded substantial back‑taxes. Pernod Ricard itself is already fighting an antitrust lawsuit and a ₹314 million back‑tax claim for alleged undervaluation, while Diageo agreed in August to reformulate drinks after a food‑safety regulator banned certain flavours in several states.
Both companies have pledged full cooperation with the audit, which is expected to be completed by the end of Q3. Depending on the findings, authorities could issue back‑tax notices that would increase the companies’ liabilities by up to 50% of the imported volume. The outcome will likely influence how other liquor exporters approach the new tariff regime.