India has slashed the import duty on bourbon whiskey to 50 per cent as it warmed up to negotiating a trade deal with the US.

The reduction in customs duty on bourbon whiskey was notified on February 13 just ahead of Prime Minister Narendra Modi’s talks with US President Donald Trump.

However, there has been no reduction in basic customs duty on the import of other liquors. They would continue to attract 100 per cent duty.

The US is the primary exporter of bourbon whiskey to India accounting for about one-fourth of all such liquor imported into India.

As per the notification issued by the Department of Revenue, bourbon whiskey would now attract 50 per cent customs duty on its import.

It was 150 per cent earlier.

India has imported bourbon whiskey worth $2.5 million in 2023-24.

India and the US have resolved to more than double the two-way trade to $500 billion by 2030 and announced plans for a bilateral trade agreement with a view to bring down duties and increase market access.

The timing of the duty cut on bourbon is no coincidence: Notorious for his hardline trade policies, Trump has made it clear India must open up its markets further — or face the consequences.

His reciprocal tariff threat has cast a long shadow, and New Delhi’s sudden duty cut suggests Modi is already buckling under pressure.

But the bourbon giveaway is just the first act in what promises to be a bruising trade battle.

Trump is far from done — his administration is already eyeing deeper concessions on agriculture, industrial goods, and services. With India’s $50 billion trade surplus in the crosshairs, Modi will have to decide: fight back or keep giving in.

Biswajit Dhar, a trade expert, warned of the potential consequences. “Washington has been pushing hard to open India’s market to US agricultural products. This could have serious implications, given that more than 55 per cent of India’s population depends on agriculture for their livelihood,” he said.

Professor Ram Singh of the Indian Institute of Foreign Trade (IIFT) held similar views. “Trump’s strategy appears to be a 360-degree bulwark of a lose-lose trade war. However, his transactional and unpredictable style often forces countries into negotiations, only for him to demand an even better deal for America,” he said.

Vinod Giri, director-general, Brewers Association of India, said: “Bourbons, like motorbikes, have high optics value due to their deep association with pax Americana. This out of turn reduction is done to reassure the US of Indian intent and to pre-empt any retaliatory action by using a device that costs little to India.”

Giri warned India won’t be able to hold back similar reductions on other imports.

“Because most FTAs have MFN clauses to match best offers and two, offering such concessions to one country outside a structured deal such as FTA may be questioned as discriminatory by other nations especially UK who have large stakes in Scotch whisky. In the end, duty on all alcohol will come down.”

Trump has slammed India’s high tariffs, calling the country the “tariff king”.

With inputs from PTI