After Apple was fined $38 billion, a French wine and spirits giant fell into the same trap—penalized $600 million by India.

By Wang Xinxǐ Following Apple’s $38-billion fine, it is now the turn of the French wine and spirits giant. After turning India into its largest single market globally, the ‘pig-slaughtering’ scheme ultimately landed on Pernod Ricard—the French酒业 giant behind Chivas Regal, Absolut Vodka, Royal Salute, and The Glenlivet. According to documents filed with the Delhi High Court and disclosed at the end of May 2026, India’s tax authorities demanded that the company pay approximately $314 million (nearly ₹30 billion) in back import duties. Should it lose the case, the total penalty could exceed $600 million. This amount is roughly three times Pernod Ricard’s annual profit. Moreover, India has recently launched an antitrust investigation against the spirits giant. Given Apple’s $38-billion antitrust penalty imposed by Indian authorities, Pernod Ricard’s $600-million fine may only be the beginning—larger penalties could still lie ahead. Pernod Ricard’s troubles were sown over a decade ago. India is a country with high tariffs and a complex tax regime. Multinational corporations entering India often resort to related-party transactions to reduce tax liabilities. Domestic Indian distillation technology lags, and low-end alcoholic beverages suffer from poor quality; the premium market is entirely dominated by imported whiskies. To protect its domestic liquor industry, India imposes among the world’s highest punitive tariffs on imported spirits—up to 150%. As a result, importing finished premium liquor at full tariff rates renders virtually no profit after factoring in duties and costs. All foreign liquor companies—including Pernod Ricard and Diageo—adopt a uniform model in India: importing semi-finished products and bottling them locally. Specifically, they import whisky concentrate (‘new make spirit’) from their overseas parent factories, then blend, bottle, and sell in India. This model is legal per se. However, Pernod Ricard’s Indian subsidiary procured whisky concentrate from its UK-based subsidiary Chivas Brothers at transfer prices set entirely internally. According to Indian authorities, the company used internal codes to denote the age, malt type, maturation process, and quality grade of imported concentrates—making subsequent verification and evidence collection extremely difficult for Indian regulators. During audits, Indian authorities found that Pernod Ricard’s declared import values were 67.5% lower than fair market prices. The lower the declared import value, the less duty payable. Hence, the $600-million penalty comprises principal unpaid duties accrued over more than a decade, plus interest and penalties. Clearly, India had been keeping meticulous records—and waited until the time was right to levy a massive fine. As early as 2022, Reuters reported that Indian customs had issued Pernod Ricard a tax warning totaling approximately $244 million. At the time, Pernod Ricard announced it would halt all new investments in India and even sent a direct open letter to Prime Minister Modi via media, warning that ongoing tax disputes were deterring fresh investment. It wasn’t until the second half of 2025 that Indian investigative agencies concluded—in September—that Pernod Ricard had “deliberately complicated” its reporting information. A government court filing dated January 24, 2026 further alleged that, when importing bulk Scotch whisky concentrate from its UK subsidiary Chivas Brothers, the company failed to truthfully disclose the age, composition, and specific ingredients of the imported products. Pernod Ricard was accused of undervaluing these imported concentrates by approximately 67.49%.

LG was fined RMB 108 million in India but breathed a sigh of relief and continued building factories—having long treated Indian fines as part of its operational costs.

LG has operated in India for 28 years. In Q3 2026, LG held a 27.3% market share in India’s TV sector—ranking second. Yet in the premium OLED TV segment, LG commanded a 62.4% share—effectively monopolizing the category. In Q4 FY26, LG India achieved record quarterly revenue, with its TV business posting an EBIT margin of 13.4%. A company holding a 62% share in India’s premium TV market was asked to pay RMB 100 million in customs duties. So why doesn’t LG leave? Because it simply cannot afford to. LG’s operations in India go far beyond selling TVs. It operates three large-scale manufacturing facilities—in Greater Noida, Pune, and Sanand—producing televisions, refrigerators, washing machines, and air conditioners entirely locally. Its distribution network, built over two decades, spans tens of thousands of offline retail outlets. LG’s Indian factories have taken five to eight years to build; its distribution channels have been cultivated for over a decade; and its brand enjoys high recognition among India’s middle-class households. If LG withdrew from India solely due to a RMB 100-million penalty, it would forfeit hundreds of billions of RMB in fixed assets—and sacrifice two decades of market presence. More crucially, consider India itself as a market: With 1.4 billion people and a median age under 30, India’s middle class accounted for 29% of the population a decade ago—now 53%, and projected to reach 60% by 2030. India’s TV market stood at $4.7 billion in 2025, with OLEDs representing just 4%—indicating the premium segment remains in its infancy, and nearly all future growth will come from here. LG currently commands a 62% OLED share—meaning it occupies the top position in a market yet to take off. That vantage point is simply too valuable to abandon—even for a $100-million penalty. This is precisely what India has calculated: such companies cannot afford to exit. And from these companies’ perspective, as long as Indian fines are treated as routine operating costs, the Indian market remains viable. India has become a ‘penalty calculation exercise’ for multinationals. LG’s penalty is no isolated incident. In the same week, India’s Directorate of Revenue Intelligence (DRI) simultaneously investigated both Samsung and LG over OLED-related import duties. Looking further back: Samsung was ordered to pay $601 million in back taxes and penalties for allegedly evading import duties on telecom equipment; Volkswagen faces a $1.4-billion demand for allegedly disassembling vehicles into parts to circumvent higher整车 import tariffs; and Pernod Ricard was hit with a $314-million demand for undervaluing imported Scotch whisky concentrate. Vodafone fought Indian retroactive tax law changes for over a decade before exiting; Apple faces up to $38 billion in penalties following antitrust investigations by India’s Competition Commission of India (CCI). Taken together, these penalties form a revealing pattern. Where are the rules written? Entirely in the hands of India’s tax authorities. Are OLED components classified as a subset of LED products (5% duty) or as a distinct category (15% duty)? The law is silent—so the DRI decides, and its interpretation stands. Should royalty payments be included in the dutiable value? Interpretations vary across cases and ports. Companies entered India calculating costs based on prevailing rules—only to find those rules changed years later, triggering wholesale re-audits of a decade’s worth of imports. That is why multinational behavior in India is remarkably uniform: treat fines as operational costs. For LG, RMB 100 million is manageable—especially relative to its annual profits in India, which run into several billion RMB. When Samsung faced its $600-million penalty, it didn’t withdraw either.

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