India's Scotch probe of Diageo, Pernod undermines UK pact benefits: ISWAI

India's Directorate of Revenue Intelligence (DRI) has launched an investigation into Diageo and Pernod Ricard, searching their offices and questioning executives this month. This probe is focused on whether the companies misclassified imported products, which could have implications for the recently negotiated India-UK trade deal.

The trade agreement, which came into effect on July 15, included a significant reduction in whisky tariffs, halving import taxes on certain Scotch imports from 150% to 75% immediately, with a further reduction to 40% over the next decade. The British government had emphasized that this deal would benefit "iconic UK products" like whiskies.

However, Indian investigators have indicated that the reduced tariff does not apply to bulk Scotch concentrates, leading to the first major dispute since the agreement's implementation. This situation has raised concerns among industry stakeholders.