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India keeps tariff reforms at bay

Published:  23 July, 2008

The Indian government has resisted pressure from the EU and World Trade Organisation (WTO) to reform discriminatory tariffs on wines and spirits.

India failed to reform its duty on imported spirits in the budget of 28 February, despite an EU investigation calling the current taxation a blatant violation' of WTO rules. The European Commissioner for wines and spirits, Mariann Fischer Boel, will fly to Delhi this week as part of an EU delegation to urge the Indian commerce minister to reduce taxes on wines and spirits.

Gavin Hewitt, chief executive of the Scotch Whisky Association (SWA) and one of the delegates, said: The budget was a last opportunity for India to reform. That opportunity has been missed and we're now urging the EU to take the matter to a WTO panel at the earliest opportunity.'

The SWA called the current taxation exorbitant', in comparison with other emerging markets: a bottle of Scotch can be subject to duty of 550% in India, but only 10% in China and 20% in Brazil. Indian spirits can be imported into the EU tariff-free.

David Williamson, public affairs officer at the SWA, said: India is a whisky market and we've not had the chance to operate on a level playing field.'

The matter will be referred to a WTO panel and a ruling is expected in early 2008.