New Delhi: Even as the European Union's (EU) Agriculture Commissioner and India's Commerce Secretary saw eye to eye on agricultural talks at the WTO and the Budget - both had hoped the Budget would remove high discriminatory taxes on imported liquor - Union Commerce and Industry Minister Kamal Nath said on Friday that India is at an advanced stage of negotiations with EU.
He said India expects to correct the high duties imposed on imported wines and spirits.
The EU wants to prise open India's large wines and spirits market, but the problem is that India imposes maximum permissible customs duty on spirits and a third less than that permitted on wine.
The EU's grouse is with additional customs duty that it says, inflates the price of wine by 280 per cent and that of spirits by 550 per cent. These violate the WTO principle of national treatment.
The EU and the United States (US) had lodged a complaint with the World Trade Organisation over the issue, which they see as unfair trade barriers for its wine and spirits.
''We recognise it is high. We are in talks with the EU. It is an advanced stage. I believe this situation will be corrected,'' Kamal Nath was quoted by news agency UNI as saying.
He said India was not averse towards a reduction in the import duties provided the tariff cuts did not effect the domestic market.
''Give us a tariff clarification that does not cause injury to India, and we will continue to reduce tariffs,'' he was further quoted as saying.
Last November, the EU had given notice for consultations. If the issue is not resolved within the next few weeks, the EU can invoke the WTO's dispute settlement mechanism.
Additional customs duty clearly violates WTO principles. On wine at least, these can be replaced by higher customs duty.
This can be done outside the Budget because Parliament's approval is not needed.
But India domestic liquor industry, cosseted by high duties, wants to portray less restrictive imports as promoting the drinking habit, which is not the case. If one has to sin at all, it is better to do it with some refinement.
Meanwhile, the US has also requested WTO consultations with India over what it calls ''excessive duties'' on wine and distilled spirits.
A European spirits producers organisation has said EU exports of spirits to India were just $57 million in 2005 while wine exports stood at 7 million euros.
(With imports from UNI)
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