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India to lower customs duties on wines, spirits from European Union

DBR Staff Writer Published 17 June 2013

India is considering to lower customs duties on wines and spirits bought from the European Union to 40% from the current 150% under a bilateral free trade agreement being negotiated between the two.

The offer by Commerce and Industry Minister Anand Sharma to EU trade commissioner Karel de Gucht at the Organisation for Economic Co-operation and Development summit held in Paris recently is huge, compared to India's earlier proposal to cut the customs duty to 80%.

India also offered to lower the entry price per bottle of wine to $3.7 and whiskey to $5.5.

But the EU is asking to further cut down the duties for wines and spirits to 30% and the prices of a bottle of wine and whiskey to $3.5.

A senior commerce department official was quoted by Business Standard as saying that India can not offer below this.

"It is a make-or-break situation now. We have told them clearly what it is and we cannot go below this. We have to follow the TERC (Trade and Economic Relations Committee) mandate," he added.

Indian Wine Academy president Subhash Arora told the news paper: "A reduction of duties to 40 per cent across the board means opening the gate for cheap imports. This way, the Indian wine industry will perish and this will also impact the farming community."