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and Japan have requested WTO to let them join in the
high custom duty dispute between EU and India as the
third parties. Australia and the USA have already sought
the third party status. USA has also filed a separate
dispute against India.
This does not mean a direct dispute has
been raised but it will help mount pressure on India
to sort out the issue of unfair duties. Chile is a major
producer and exporter of wine, whereas Japan, like EU
and the US, has very liberal import tariff policy for
wines and liquor.
India charges Customs duty on wines, at
100%; within the WTO allowed limit of 150%. But it also
imposes additional Customs duties (ACD) which takes
the total duty up to a whopping 266%. This additional
duty is being challenged by the EU and the US.
Sources in the Indian government have already announced
that in July they will take steps to remove the ACD
and allow state governments to impose excise duties
on imported wines, equivalent to the excise charged
on the Indian wines. "Since the local levies will
be same for foreign and Indian wines, the national treatment
clause will not be breached," said an official.
Beer Baron, Vijay Mallya, who has a lot of political
clout, is reportedly lobbying with the government to
reduce the duties now since he has bought over the Scottish
White and Mackay and needs lower duties to help him
market their scotch to the booming liquor market. Earlier,
he had been opposed to the reduction as it might have
cut into his sprawling beer business.
The latest step to be taken by the government, hopefully
next week may not be acceptable to the EU and the US.
A number of states, especially in the South, charge
very high local taxes even for Indian liquor and the
removal of ACD may not help bring down the prices.
Mariann Fischer Boel, Agricultural minister for EU had
warned during her visit to India earlier this year that
if India replaced the ACD with other duties, EU would
take the dispute to WTO.
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