India's First Wine, Food and Hospitality Website, INDIAN WINE ACADEMY, Specialists in Food & Wine Programmes. Food Importers in Ten Cities Across India. Publishers of delWine, India’s First Wine.
India’s Retail Sector : A Developing Story  India in Numbers : Useful Statistics Wine & Health 101 : Frequently Asked Questions
Advertise With Us
US Report on Indian Market Released
Top Ten Importers of India
On Facebook
On Twitter
Delhi Wine Club

Posted: Tuesday, July 17 2007. 3:00 PM

Editorial: Suspension of Complaint to WTO by EU Premature

In a rather surprising move the European Union has suspended its complaint against India to WTO for its unjustifiable import tariffs on wine and liquor. The EU has agreed that the three-member WTO panel investigating its case against India may be suspended for up to a year.

In a statement, the European Commission said that it “will now continue to monitor the situation on the ground to make sure that no new discriminations appear at state level”.

The Scotch Whisky Association has already given a cautious welcome to the move by India. Though the remaining duty levels still amount to 150%, Scotch whisky stands to gain substantial new sales in India as a result of the liberalisation

The change of heart follows India’s recent decision to remove ‘Additional Customs Duty’ on imported beer, wine and spirits, which could bring the total customs bill on alcohol as high as 550% of the cost of the drink and wine as high as 266%.

The increase in basic duty announced by the government on wines from 100% to the outside limit of 150% as per the agreement WTO would have to be acceptable to EU and all the other members of the EU. Brussels did however play the usual rhetoric, saying it regretted that India was raising its basic duty on wines to 150 percent from 100 percent, which is still within the country's WTO limits.

EU appears to be thankful because there is a lot more scope for export of beer and whisky from Europe. Last year 132 million cases of beer were consumed in India while the comparable figure for liquor was 120 million cases. With a total consumption of less than a million cases of wine, EU does not seem to be much perturbed that the premium quality wines would become more expensive than before by 7-10% even if the states did not start charging the extra excise duty as the central government hinted.

Under Section 47 of the Indian Constitution State governments have the power to set duty levels and may adjust them following the central government’s move. The center can pass legislation through an Act of Parliament by which the states can be restrained to keep the highest levels of such duties on imported alcoholic products from overseas or other states, to the same level as the Indian made products. However, no such bill was presented in the parliament, contrary to the governmental indications earlier.

Maharashtra has utilised the powers given to it under this Section and announced a special fee of 150% on the assessable value of imported wines and 200% on foreign liquor, thus wiping out most of the benefits allowed by the scrapping of ACD. While the honest, toiling Indian wine producer claims he will be hurting by the government policy, the importer is grumbling because he will not really be able to sell more. One section that is going to thrive now is the bootlegging.

U.S., suspecting that this type of a move will be made by the states, is stalling and has said it was continuing with its separate WTO probe. India's scrapping of the additional duties was a "positive step," said Stephen Norton, a spokesman for the Office of the U.S. Trade Representative. But he said Washington would continue its case against India "until the concerns raised in the dispute are resolved."

Also Read:

Read my Editorial in the next issue: The Indian Wine Duties Circus


I Want to Comment ...
Name *
Email *

Please enter your comments in the space provided below. If you wish to write, mail your article to


Please note that it may take some time to get your comment published...Editor


Wine In India, Indian Wine, International Wine, Asian Wine Academy, Beer, Champagne, World Wine Academy


Copyright©indianwineacademy, 2003-2012 |All Rights Reserved
Developed & Designed by Sadilak SoftNet