Pressure mounts on India to cut wine, spirits duties
Pressure mounted on India on Wednesday to cut high import duties on wine and spirits after the United States said it had joined the European Union asking the World Trade Organization to intervene in the matter.
By Agencies |
NEW DELHI: Pressure mounted on India on Wednesday to cut high import duties on wine and spirits after the United States said it had joined the European Union asking the World Trade Organization to intervene in the matter.
EU Agriculture Commissioner Mariann Fischer Boel, who is in New Delhi, was set to meet Indian Commerce Minister Kamal Nath later Wednesday to press the issue. On Tuesday, US Trade Representative Susan Schwab said Washington had filed a complaint with the WTO on the tariffs India imposes on wine and spirits, which are seen abroad as unfair trade barriers.
Scwab's announcement came hours after Boel told reporters that she was disappointed India's 2007-2008 budget, unveiled last week, didn't lower the high tariffs on wine and spirits. The European Commission had filed a complaint with the Geneva-based WTO on November 20.
Under the WTO rules, the first step in such cases is to encourage consultations between the member nations. If there is no progress within 60 days, the aggrieved party can ask for a panel to be set up to rule on the dispute whose decision would be binding on both sides.
Although that deadline has passed in the case of the European Union, Boel said she would still favor to resolve the issue through talks rather than turn it into a dispute at the WTO. "We are discussing within the European Union on what steps to be taken next," Boel said.
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"I am in favor of negotiations rather than litigation." India's basic import duties on wine and spirits at 100 per cent and 150 per cent respectively are within the WTO limits, but federal surcharges and state-level taxes take the tariff protection up to 540 percent in some cases. "With its fast-growing middle class, India could be an important export market for American wines and distilled spirits if not for these layers of duties," Schwab said in Washington. She also hoped that the matter could be resolved through consultations. The EU and the United States top the list of India's trading partners.
India is one of the largest markets for alcohol in the world with a huge potential to grow, but imports account for a meager share in total consumption.
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