WTO opens inquiry on India's spirit tariffs

By Chris Mercer

- Last updated on GMT

Related tags International trade European union India

European wine and spirits firms saw the door to India open a
little wider Tuesday, after the World Trade Organisation
agreed to investigate the country's high import tariffs.

The European Commission, which requested the inquiry, has already denounced India's import tariffs on wine and spirits as a "blatant violation"​ of World Trade Organisation (WTO) rules. Tariff rates ranged from 177 per cent to 550 per cent in some cases, denying foreign firms access to India's potentially lucrative wine and spirits market, the Commission said in its submission to the WTO. India rejected calls for a WTO 'dispute settlement panel' two weeks ago, but was forced to accept the EU's second request. Commission officials have told BeverageDaily.com​ they are determined to make India drop its tariffs. They say 150 per cent should be the country's maximum duty on wine and spirits imports, under WTO rules. India has made moves designed to acquiesce trade officials, with talk of a new law to reduce tariffs. But a split between India's commerce and finance ministries is understood to have held up progress, with treasury officials concerned about potential lost tax revenue. Europe's drinks makers have been pushing for WTO action against India during the last year. The country houses a sixth of the world's population, and, despite a vast number of people on low incomes, it is viewed as a market with high potential. Scotch whisky exports to India dropped by six per cent last year, according to the Scotch Whisky Association (SWA), which has pressed harder than most for action against India. David Williamson, of SWA, said there was "growing international pressure"​ on the country. Both the US and Australia are in the early stages of WTO proceedings against India's tariffs.

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