US, Australia join EU for cut in Indian duty hangover
The US and Australia have jumped on to the EU bandwagon pressuring India to bring down its steep import duties on wines and other alcoholic beverages.
By Amiti Sen, TNN |
NEW DELHI: The US and Australia have jumped on to the EU bandwagon pressuring India to bring down its steep import duties on wines and other alcoholic beverages.
The two countries have submitted to the World Trade Organization (WTO) that they should be allowed to join the India-EU consultations on the issue since they too have a stake in the matter. The developments could now force the government to review its stand on the duty structure in the segment.
India, which was hoping to settle the affair bilaterally with the EU — without fighting it out at the WTO — now has a more difficult task at hand with two more countries to appease. The EU had complained to the WTO last month that the high duties on wines and spirits imposed by India violated WTO norms.
Its main contention was that although India had taken on a WTO commitment of binding its duties on liquor at 150%, its aggregate duties ranged from 177.33% to 264% for imported wines and from 252.22% to 550% for imported spirits.
It had requested for consultations with India to discuss the problems it had with the country’s duty structure. India, which wants to avoid a dispute at the WTO, agreed to try to sort out the issue with the EU bilaterally. In fact, a team from Brussels is expected to land in New Delhi this week to hold discussions on the subject.
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Sources said that while India was not prepared to meet the EU’s demand fully, it could consider lowering duties to a certain extent. The problem that India would face now is that it would not only have to work around the EU, but also deal with the US and Australia.The US, in its submission, said that it has substantial trade interest in the consultations since it is a leading exporter of wines and spirits and its exports to India in the last five years, despite the high duties, had increased by 350% in case of wines and 200% in case of spirits.
Australia pointed out that its exports of wine to India has been increasing significantly in recent years from $A 0.21 million in 2000 to $A 1.796 million in 2005. Australia’s market share of India’s wine imports has increased from 1.6% in 2000 to 11.9% in 2005.
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