A three tier additional customs duty on imported liquor into India was imposed by the Central government in the last week. Multinationals have warned it is a serious setback to the aspirations of the international drinks companies as well as a boost to the illegal trade in alcohol in the country.

Under the new laws, brands under $20 a case will attract additional taxes of 150%; for cases between $20 and $40 an extra 100% will be levied and a 75% tax has been placed on brands over $40 a case.

Including the basic duty of 224% and State levies, the net duty on imported alcohol will be as high as 740% on goods not exceeding $20 per case, 549% for the $20-$40 category and 467% for cases above $40.

Commenting to India's Financial Express, UDV general manager global brands Sunhil Sethi said: "It's rather disappointing that in the budget, instead of curtailing the current tariff additional duty has been imposed on imported spirits."

He said that a 750ml bottle of Johnnie Walker Black Label would now cost around Rs4,670 ($100.40) while the Red Label of the brand would cost Rs1,800 ($38.70).

Sethi continued: "It is definitely going to affect companies like us. The end consumer price is beyond affordable reach of consumers. However I think the biggest setback is for the Centre since the demand will further shift from the legitimate to the illegitimate channels due to these measures, thereby causing a huge loss of revenue."