The Scotch Whisky Association, which has taken legal action against some of the importing companies over the years, urged EU-wide action on the problem in its 2013 annual report released last Friday.
The EU follows a strict definition of whisky, introduced in 1989, which requires it to be distilled from cereals, below 94.8 per cent volume so it retains the flavour and aroma of the raw materials, and to be matured for at least three years in wooden casks. No flavourings may be added to whisky.
"In contrast, there is no compulsory definition of whisky in India, and the Indian voluntary standard does not require whisky to be distilled from cereals or to be matured.
"Very little Indian 'whisky' qualifies as whisky in the EU owing to the use of molasses or neutral alcohol, limited maturation (if any) and the use of flavourings. Such spirits are, of course, considerably cheaper to produce than genuine whisky," the report claimed.
Since 2009, the association has learned of large quantities of such Indian 'whisky' being imported in bulk into the 28-member European Union. The majority of it is mixed with other whiskies and is sold by supermarkets at extremely low price points, described simply as 'Blended Whisky'.
"These products undercut all genuine whiskies, including Scotch Whisky, Bourbon and Irish Whiskey. Their sale is unfair competition against genuine whisky producers," it added.
The report called the quantities concerned as "extremely worrying".
"Over a period of around 4 years, the Association traced the import of 4.5 million litres of Indian 'whisky' which, if mixed with genuine whisky to produce these 'Blended Whiskies', could have produced 25 million bottles," it said.
The association said that it has raised the issue with the EU Commission and with the enforcement authorities in France, Spain, Belgium and the Netherlands, the countries into which the bulk of Indian whisky is being imported.
"Legal action has also been taken against some of the importing companies.
"Some progress has been made in stopping these imports but further action by the Member States concerned is necessary. The association will be pursuing the issue," it stressed.
The association has also being lobbying for alcohol to be included in India's proposed Goods and Services Tax (GST) regime.