India: Watering Down Spirit Import Duties
March 2007 : Relief as India hints at watering down spirit import duties
GAVIN Hewitt, chief executive of the Scotch Whisky Association, will return from India sniffing victory this week over the punitive tariffs situation after the country's finance minister said that he wants to find an amicable solution.
In a humiliating climbdown, minister for commerce Kamal Nath, said that India is considering cutting import duties on wine and spirits to avoid having the issue decided by the World Trade Organisation.
Speaking from New Delhi after a series of meetings with Hewitt and delegates from the EU, Nath said: "This is being discussed at the highest level in the government. India doesn't want to take it to the dispute settlement level" at the WTO.
The breakthrough comes just days after the Indian government shocked the Scotch whisky industry by not cutting tariffs in its budget. At the very least, executives were expecting some concession on a system which subjects all imported spirits to an additional duty of between 25% and 550%.
Hewitt flew out a week ago to tell Nath that the budget was the last opportunity for the matter to be resolved amicably.
His case was strengthened as the US administration waded in, officially requesting formal WTO consultations with India.
Deborah Lamb, senior vice-president for international trade at the Distilled Spirits Council, said: "It is time for India to eliminate its WTO-incompatible practices and dismantle the web of additional duties and charges that unfairly blocks imports of spirits and wine."
But last night sources close to the SWA said that although they welcome Nath's comments they will not rest until the tariffs have been removed. They are now looking for a favourable WTO ruling within 15 months.
In the next few weeks Peter Mandelson's trade department at the European Commission will notify the WTO that cuts have not been forthcoming and will request the formation of a panel to look at the issue.
An SWA spokesman said: "Both the EU and USA have made it clear this week that vague hints of possible future change are insufficient. These have been heard before. India must act quickly to reform its discriminatory tax system or face a WTO panel in the coming weeks. This position has been strongly backed by the SWA in its own meetings with the Indian Ministries of Commerce and Finance."
Despite all the hype surrounding potentially enormous emerging markets in South America and the Far East, they still pale into insignificance compared with that of India. A snapshot of emerging markets across the world shows that, even with India's exorbitant tariff barriers, the country still buys more Scotch whisky than Russia, China, Poland or Turkey.
The latest export figures from the SWA show that in 2004 only 700,000 cases were shipped to China, 600,000 to Russia and Turkey and just 200,000 to Poland. This compares to one million cases sent to India.
Source: Scotland On Sunday, March 11, 2007
GAVIN Hewitt, chief executive of the Scotch Whisky Association, will return from India sniffing victory this week over the punitive tariffs situation after the country's finance minister said that he wants to find an amicable solution.
In a humiliating climbdown, minister for commerce Kamal Nath, said that India is considering cutting import duties on wine and spirits to avoid having the issue decided by the World Trade Organisation.
Speaking from New Delhi after a series of meetings with Hewitt and delegates from the EU, Nath said: "This is being discussed at the highest level in the government. India doesn't want to take it to the dispute settlement level" at the WTO.
The breakthrough comes just days after the Indian government shocked the Scotch whisky industry by not cutting tariffs in its budget. At the very least, executives were expecting some concession on a system which subjects all imported spirits to an additional duty of between 25% and 550%.
Hewitt flew out a week ago to tell Nath that the budget was the last opportunity for the matter to be resolved amicably.
His case was strengthened as the US administration waded in, officially requesting formal WTO consultations with India.
Deborah Lamb, senior vice-president for international trade at the Distilled Spirits Council, said: "It is time for India to eliminate its WTO-incompatible practices and dismantle the web of additional duties and charges that unfairly blocks imports of spirits and wine."
But last night sources close to the SWA said that although they welcome Nath's comments they will not rest until the tariffs have been removed. They are now looking for a favourable WTO ruling within 15 months.
In the next few weeks Peter Mandelson's trade department at the European Commission will notify the WTO that cuts have not been forthcoming and will request the formation of a panel to look at the issue.
An SWA spokesman said: "Both the EU and USA have made it clear this week that vague hints of possible future change are insufficient. These have been heard before. India must act quickly to reform its discriminatory tax system or face a WTO panel in the coming weeks. This position has been strongly backed by the SWA in its own meetings with the Indian Ministries of Commerce and Finance."
Despite all the hype surrounding potentially enormous emerging markets in South America and the Far East, they still pale into insignificance compared with that of India. A snapshot of emerging markets across the world shows that, even with India's exorbitant tariff barriers, the country still buys more Scotch whisky than Russia, China, Poland or Turkey.
The latest export figures from the SWA show that in 2004 only 700,000 cases were shipped to China, 600,000 to Russia and Turkey and just 200,000 to Poland. This compares to one million cases sent to India.
Source: Scotland On Sunday, March 11, 2007
posted by Sattu | 10:54 PM
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