by Subhash Arora
The European Union formally initiated on Monday the process to take its dispute with India over the wine and spirits duty regime to the World Trade Organisation, even as the government said attempts to resolve the issue amicably
will continue. The Commerce and Industry Minister, Kamal Nath, said: "India is likely to hold another round of discussions with the EU to resolve the ongoing trade dispute over the \'wine and spirits\' duty regime. If they want to go to the dispute tribunal, they have the right to do so; but we have also taken a specific stand," he told reporters in New Delhi.
In a bid to resolve the dispute, Kamal Nath had last week spoken with EU Trade Commissioner Peter Mandelson, who had come to India after a visit to China. The EU had gaven 17th November as the deadline for resolving the issue. The talks, however, as was expected, failed to yield any result.
EU wine and spirits producers have for years raised concerns about the excessive duty burden on imports of spirits and wines into India. The key issue at stake is additional duties levied by India on imported spirits and wines. "We will always respect genuine sensitivities in India\'s development, but this is out and out protectionism, which even the Indian Government has not been able to justify in the past," the European Commission spokesman for trade, Peter Power, said in Brussels. "There must be change and we have no alternative but to pursue the matter in this way," he added.
The EU has maintained that the Indian authorities have levied additional duties on top of basic customs duties raising the cumulative duty burden to between 177 and 540 percent depending on the import price of the products. Though certain categories of hotels and restaurants enjoy privileges, duties on wine continue to be s high as 264%. Excise duties and VAT are additional. Another issue relates to restrictions on the sale of imported spirits and wines in the state of Tamil Nadu, where only Indian made spirits and wines are allowed to be sold.
