In a move likely to energize India’s burgeoning premium spirits market, the government has slashed customs duty on bourbon whiskey to 50%, down from a steep 150%, as part of a landmark India-US trade deal. The announcement, made ahead of Prime Minister Narendra Modi’s bilateral talks with US President Donald Trump, signals a significant step toward fostering deeper trade ties between the two nations.
While the reduction applies solely to bourbon whiskey, other imported spirits, including Scotch, vodka, and rum, remain subject to a hefty 100% customs duty. The decision has stirred excitement within India’s food and beverage (F&B) sector, which anticipates a surge in demand for bourbon whiskey, particularly in high-end bars, restaurants, and luxury retail outlets.
The US is a key exporter of bourbon whiskey to India, accounting for 25% of such imports. In 2023-24, India imported $2.5 million worth of bourbon, with major contributors including the US ($0.75 million), UAE, and Singapore. Experts believe the reduced tariff will make bourbon more accessible to consumers, enabling F&B establishments to expand their American whiskey offerings.
Hospitality insiders see this as a game-changer. “The reduced customs duty on bourbon opens new opportunities for India’s premium bar culture, allowing us to offer more affordable yet high-quality American whiskies to our patrons,” said a luxury restaurant manager in Mumbai.
The move is also expected to bolster India’s evolving cocktail culture, with bourbon whiskey becoming a key ingredient in innovative menus. However, critics argue the policy’s narrow focus on bourbon might leave Scotch whiskey enthusiasts and other liquor importers disappointed.
The trade deal marks a broader push to double India-US bilateral trade to $500 billion by 2030, aligning with the country’s vision for a stronger F&B export-import landscape. As bourbon whiskey enthusiasts and F&B operators alike celebrate the lowered tariff, the industry anticipates an infusion of new flavors and trends into India’s growing spirits market.
