Sameer Mahandru Talks Tariffs: What US Alcohol Duty Cuts Mean for India's AlcoBev Industry
US President Donald Trump’s tariff announcements have significant implications for the global AlcoBev industry.
The news of tariffs on the AlcoBev industry in India has come as a rude shock to industry leaders. The Indian Alcohol and Beverage industry has the potential to reach $64 billion by 2030, driven by increasing demand in Tier 2 and Tier 3 cities, premiumization and rising disposable incomes. This upward trajectory seemed promising; however, this recent development has cast a shadow of doubt.
Sameer Mahandru, a leader in the AlcoBev industry comments on this latest development and explains what it means for the sector.
US President Donald Trump’s tariff announcements have significant implications for the global AlcoBev industry. Trump’s tariffs are part of a broader strategy to address trade imbalances, with the US imposing reciprocal tariffs on various countries including India.
The tariff rates on the Indian alcohol market vary significantly depending on the type of beverage. As of 2025, India imposes a 100% customs duty on most imported alcoholic beverages including wine, vermouth, and other spirits, except for Bourbon whiskey, which has been reduced to 50%.
Sameer Mahandru says, “These tariffs by our government align with the ‘Make in India’ movement, designed to protect India’s domestic alcohol industry by discouraging cheap imports that could undermine local producers. While the reduction in bourbon tariffs signals India’s willingness to negotiate strategically with trade partners, the broader tariff structure still continues to be challenging for foreign liquor companies who wish to enter India’s multi-billion spirits market”
How will tariffs affect the Alcohol and Beverage industry in India?
Indian AlcoBev industry is estimated to get the highest tariff hike at 122.10%, even though the exports are only $19.20 million. This small volume points towards the fact that the direct financial impact on Indian alcohol importers is limited. Also, the tariff of 122.10% will be levied on Indian alcohol entering the US market, making it more expensive for American consumers and potentially reducing demand.
However, the consequences of these tariffs extend beyond immediate financial losses for the industry.
Industry leaders are worried that aggressive tariff measures may set a negative precedent for future Free Trade Agreement negotiations by weakening their position in trade negotiations with global partners.
To add to these apprehensions is India’s high tariff regime which has made economies like the US and the EU a bit uncomfortable in the past.
There also exist growing fears of dumping cheap imported spirits into India, especially after declining tariffs on imported bourbon whiskey, which threatens to undermine the domestic market share and harm local producers.
“These converging challenges provide an empirical rationale for a swifter and stronger governance needed to nurture and protect the Indian AlcoBev industry amid rapidly changing global challenges with added uncertainties in international trade.” believes Sameer Mahandru.
“This may be a turning point for AlcoBev Industry in India, however what direction it takes is yet to be seen,” he adds.
In summary, Indian players in the liquor industry will need to concentrate more on innovation, quality improvement, and strategic alliances. In effect, it means developing strong home-grown brands that can take on international brands on grounds of quality and price and transforming themselves in response to an increasingly sophisticated consumer.
While high tariffs protect the domestic market by limiting the influx of imported spirits, they also restrict global market access and stifle growth and innovation. The Indian alcohol industry must focus on strengthening its domestic growth and promoting innovation.
Balancing protectionist measures with forward thinking strategies will definitely secure its place as a global leader in years to come.
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