In a significant move to strengthen trade relations with the United States, India has reduced its import tariffs on Bourbon whiskey from 150% to 50%.

This decision, which took effect on 13 February 2025, follows high-level discussions between United States of America's president Donald Trump and Indian Prime Minister Narendra Modi.

Historically, American whiskey has faced challenges in India due to high import tariffs, with Bourbon whiskey accounting for only 25% of all liquor imports into the country.

In 2023-24, India imported bourbon whiskey worth USD 2.5 million, with the United States accounting for USD 0.75 million of that total, according to a report by Hindustan Times. This indicates that American Bourbon currently represents approximately 30% of the bourbon market in India.

The reduction in tariffs is expected to make US bourbons more competitive against other imported spirits, potentially increasing their market share.

Notable US bourbon brands such as Jack Daniel's, Jim Beam, Woodford Reserve, Maker's Mark, Gentleman Jack, and Old Forester are expected to gain a stronger foothold in India, where consumer interest in premium spirits continues to rise.

The policy change comes at a time when American spirits producer Sazerac has expressed plans to expand its Bourbon offerings, viewing India as a priority market due to its growing whiskey consumption and premiumisation trends.

The decision to lower tariffs is part of a broader strategy by India to address trade imbalances and respond to international critiques of its high tariff barriers.

President Trump has previously referred to India as the 'tariff king', citing the country's average 14% tariff rate on U.S. products. In response, India has initiated several tariff reductions across various sectors, including Bourbon whiskey, to strengthen economic ties with the U.S. and demonstrate a commitment to fair trade practices.

In a joint statement following bilateral talks, India and the US pledged to more than double their two-way trade to USD 500 billion by 2030, with plans for a bilateral trade agreement aimed at reducing duties and increasing market access.

The reduction in Bourbon whiskey tariffs marks a new chapter in the trade relationship between the two nations, offering opportunities for American distillers to tap into India’s rapidly expanding spirits market.

The Distilled Spirits Council of the United States (DISCUS) expressed strong support for the policy change.

Chris Swonger, president and CEO, DISCUS, said, “We applaud President Trump for his leadership in securing this historic reduction of India’s prohibitive tariff on bourbon. This significant accomplishment opens opportunities for U.S. distillers to increase their exports to the world’s largest whiskey market and bolster American manufacturing jobs. India’s 150% tariff on bourbon imports has severely restricted access to the Indian market for U.S. spirits exporters for far too long. We thank President Trump and Prime Minister Modi for their collaboration. Let’s make American whiskey great in India.”