European drinks firms urge India to ease import duties amid supply fears
A European business lobby group has urged India to temporarily axe 10% of import duties on key packaging materials, warning of potential shortages linked to disruption from the US-Iran conflict.
This comes after brewers complained of a rise in costs fuelled by a gas shortage related to the war, as reported by the drinks business last week.
The Federation of European Business in India, whose members include Pernod Ricard, Anheuser-Busch InBev, Heineken and Carlsberg, wrote to the Indian government on 2 April asking for a waiver on a 10% import duty for glass bottles and aluminium cans.
In the letter, seen by Reuters, the group said domestic manufacturers were unable to operate at full capacity, constraining supplies of essential packaging.
Rising costs, supply strain
India’s alcohol industry, estimated to be worth around $65bn (£51bn), is facing mounting cost pressures. Producers have already seen costs soar by as much as 15% due to higher raw material prices, including adhesives and cartons.
In a recent report via Reuters, the Brewers Association of India openly revealed that glass bottle prices have risen by around 20%.
Passing these costs on to consumers remains difficult. In about two-thirds of India’s states, changes to retail alcohol prices require government approval, limiting companies’ ability to respond quickly.
The lobby group warned that sourcing packaging materials from alternative international suppliers could increase costs by up to 30%, adding further strain on the sector.
Industry calls for government action
A separate appeal has also been made by the Brewers Association of India, which represents major beer producers.
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The group said supply disruptions had already significantly reduced the availability of bottles and cans, forcing companies to consider imports to meet demand.
“The war has brought down the domestic supply of glass bottles and aluminium cans substantially,” said the association’s director general, Vinod Giri. “The beer industry must import them if it has to meet domestic demand.”
Beer makers have sought price increases in several states, but authorities have so far been reluctant to approve higher retail prices, according to the association.
“Price of glass and cans has also risen substantially in the international market, which has further increased for Indian importers due to the fall in Indian rupee.
One global liquor industry source told Reuters companies in India were considering imports from Southeast Asian countries as they are concerned they could run out of cans and bottles starting from May.
Broader economic pressures
The conflict has also hit energy supplies. India relies heavily on gas for industry, including glass manufacturing. Recent data shows imports of liquefied natural gas, commonly used in glass factories, dropped to their lowest level since January 2025.
The government has said it will allocate 70% of pre-crisis liquefied petroleum gas supplies to selected commercial users.
Although the United States and Iran have agreed to a temporary ceasefire, key shipping routes such as the Strait of Hormuz remain disrupted, raising concerns about ongoing supply chain challenges.
