By Brian Johnson - 8th August 2006
Brussels is set to refer India to the WTO unless New Delhi ends excessive tariffs on imported Scotch whisky.
FT Europe reports that after an eight month investigation, the European commission has concluded that India’s duty system amounts to “blatant violations” of WTO rules and unfairly distorts competition by enforcing a much higher tax burden – up to 550 per cent – on Scotch whisky.
The astronomical duties are effectively blocking wine and spirit imports into India, says the commission.
The report also accuses New Delhi of “failing to cooperate” with the investigation.
A spokesman for EU trade chief Peter Mandelson told the Scotsman newspaper that “the commissioner urges the Indian government to consider the report and is keen to work with them to help bring their practice into line with their WTO obligations”.
The newspaper also quotes the head of the Scottish Whisky Association, Gavin Hewitt, who calls the report “comprehensive and highly critical” of the Indian duty regime.
“A non-discriminatory duty regime would offer Indian consumers more choice at a reasonable price, boost Indian government revenue and introduce a fair, level playing field for international producers,” said Hewitt.
Although no timeframe for New Delhi to take action has been stipulated, Brussels is likely to instigate WTO procedures unless an agreement can be met at the upcoming EU-India business summit in Helsinki in October.
The commission estimates that the Indian market for spirits in 2004 was 87m nine-litre cases, making it the world’s largest market for whisky.
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