India offers to slash wine and spirit duty

20th June, 2013 by Gabriel Stone

India is understood to have offered a dramatic cut to its current 150% import duty rate for wines and spirits as part of ongoing negotiations for a free trade agreement with Europe.

IndiaAccording to Business Standard, India’s commerce & industry minister Anand Sharma suggested to EU trade commissioner Karel de Gucht that the country was prepared to slash duty levels to 40%, half the level that had previously been proposed.

Although rumours of such a concession emerged a year ago, Sharma is reported to have voiced his offer during a recent summit of the Organisation for Economic Co-operation and Development as part of free trade negotiations that have been ongoing since 2007.

In a further step, Sharma offered a cut in the price of wine above which this 40% duty level would be applied to US$3.7 and $5 for whisky.

Despite these gestures, the EU is reported to be pushing for a further duty reduction to 30%, with an entry price of $3.5 for both wine and whisky.

While the opening up of the Indian market poses attractive benefits for European wine exporters, these proposals have met with fierce opposition among the country’s own wine producers.

“A reduction of duties to 40% across the board means opening the gate for cheap imports,” warned Subhash Arora, president of the Indian Wine Academy. “This way, the Indian wine industry will perish and this will also impact the farming community.”

According to a report from the end of 2012 by the Maharashtra Industrial Development Corporation, the region at the centre of India’s domestic wine production, the country currently imports just 72,000 cases of wine each year.

However, the Indian wine market is expected to continue annual growth of between 30-40% for the next six years.

3 Responses to “India offers to slash wine and spirit duty”

  1. MIDC saying the imports in 2012 was 72,000 cases – are they kidding or are they in a time freeze!! For the record, I don’t believe that they are anywhere close to the actual anything figure. Neither would anyone who knows about the imported wine market. Estimates are over 200,000 cases in the most conservative scenario. Although, personally I love the so called offer from Mr. Sharma-its absulutely fantastic and great for the Indian consumer, but I doubt that the Indian producers will sit back quietly. Subhash Arora, Indian Wine Academy

  2. Hello Subhash.
    This is great news for our Company. Nainaz has just recieved the 14 licences to enable her to be her own Importer to warehouse keeper , distributor and end user. Our Company has waited some 4 years to hear this good news on the proposed reduction of Duty. The new rates are much the same as we have in the UK where we import i believe over 387,000,000 Cases of wine for a population of say 20 million wine drinkers. So India shouldnt really worry about wine imports.

  3. john mccheyne says:

    What is India looking for in return ? For example , are they hoping to work toward a softening of EC rules on what can be labelled as whisky ?

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