The current visit of EU Agriculture Commissioner, Mariann Fischer Boel appears to have thawed the tough and negative stand the government has been taking in reducing the duties on wine and spirits-currently at 264% and 550% respectively. Coupled with a complaint by the US two days ago, the pressure is mounting on the government to soon reduce duties to saner levels.
Commerce and industries Minister Kamal Nath hinted yesterday that it was open to the idea of reduced customs duties.' India wants to avoid the matter going to the WTO's settlement body. I hope a solution can be found as the mater is being discussed at the highest level.' He said the cut could have come in the Budget but it can be declared outside the budget too.
He said the US had informed of its decision to go to WTO with a complaint against India two days back. EU has already filed the complaint. 'With its fast growing middle class, India could be an important export market for Americans and distilled spirits if not for these layered duties. We hope the matter can be successfully resolve in WTO consultations,' said Susan Schwab, US Trade Representative while filing the complaint Tuesday.
India has committed to WTO that its tariffs on wine and spirits will not exceed 150%.
Nath also told Boel that Indian whiskey manufacturers are being discriminated against by the EU. The issue is snowballing because powerful liquor lobby including Vijay Mallya are complaining about this decision. She has said that it is not possible to sell in the EU as they are using molasses and not grains for making their whiskey.