Crippling US tariffs spell bad news for Indian whisky
Indian whisky producers have had the rug pulled out from under them as Trump’s proposed 50% tariffs on Indian imports threaten the security of sales to their biggest market.
Indian distilleries have been left reeling after the US slammed India with a 50% import tariff.
Trump announced the additional 25% rate on Indian imports last Wednesday. If they go ahead, the new levies will come into play from 27 August, and will be applied on top of a 25% duty imposed earlier this month.
The new rate puts in jeopardy Prime Minister Narendra Modi’s “Make in India” push as he looks to increase international reliance on goods from the country.
Indian spirits makers have raised concerns over the significant impact the new tariff rate will have on their international sales.
The US is single malt whisky maker Amrut Distilleries’ biggest export market. For Radico Khaitan, which produces single malt brand Rampur, exports to the US contribute 10-11% of total sales. Fellow spirits giant Piccadily Agro saw exports to the US contribute 4.6% to turnover in FY24.
Madhu Kanna, head of international business at Piccadily Agro, which produces Indri Whisky, said Indian whisky producers would be put under “considerable pressure” by the tariffs.
Partner Content
Levies at 50% will put a dampener on growth for producers who have worked hard to achieve ““well-deserved recognition among US consumers” in recent years.
“In such a scenario, we would be navigating a highly competitive landscape, especially against locally produced spirits, Scotch (which currently faces a 10% tariff), and other international spirits from countries with more favourable trade terms,” she said, as reported by the Economic Times.
Whisky producers in India will inevitably have to pass rising costs on to the end consumer. Radico Khaitan said there may be a US$5-10 price increase per bottle if the 50% tariff is imposed. The company currently sells bottles at $80-100.
Sanjeev Banga, the company’s president of international business, said Radico Khaitan will have to wait and see how the situation unfolds.
“Since, it’s an evolving situation, we are trying not to give a knee jerk reaction,” he said. “The 21-day leeway period — we are hopeful that something will come up, and the situation will be formalised with the US, and it won’t be as bad.”
Trump blamed New Delhi’s purchases of Russian weapons and oil for the additional 35% rate, which puts at risk India’s largest export market, worth US$87bn in the year to the end of March.
Related news
Indian tariffs cause major barrier to entry for Australian wine producers
US spirits exports slump as tariffs and consumer shifts bite
Loss of US fine wine buyers following Trump tariffs akin to the 'exodus' of Asian buyers in 2010
