Import duties on wines, spirits may be slashed

NEW DELHI: The government on Wednesday indicated a cut in tariffs on imported wines and spirits in view of demand from major trading partners such as the EU who have threatened to activate the dispute settlement mechanism at the WTO.

"India wants to avoid that the matter goes to the WTO's dispute settlement body. I hope a solution could be found as the matter is being discussed at the highest level," Commerce and Industry Minister Kamal Nath said after meeting EU Agriculture Commissioner Mariann Fischer Boel.

He said the US had informed of its decision to go to WTO with a complaint against India two days back. The European Union has already filed a complaint and has threatened to press for a dispute settlement panel to begin litigations.

Imported wines and spirits are taxed at highs of 264 per cent and 550 per cent in the country and EU as well as the US have asked India to reduce the tariffs.

Nath said they (US and EU) were entitled to complain against India but discussions were on within the government and solution would be found out.

He said the reduction could have come in the budget but it can be outside the budget as well.

In the meeting, Nath also told Boel about discrimination being faced by Indian whiskey makers in European markets.

But Boel said Indian whiskey cannot be sold in Europe as whiskey since it is made from molasses and not grain.

Apart from taxes on wines and spirits, both sides also focused on the status of negotiations at the WTO.