EU accuses India of violating WTO norms
Nov 20, 2006 - 11:13:25 PM
, Reviewed by: Priya Saxena
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The EU report concluded that 'the Indian market has remained essentially closed for imported wines and spirits'. This followed a complaint in 2005 by EU spirits and wine producers, including the SWA.
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By Indo Asian News Service,
[RxPG] London, Nov 20 (IANS) The Scotch Whisky Association (SWA) Monday welcomed the European Union's decision to approach the World Trade Organisation (WTO) over India's alleged failure to reduce import duties on spirits and wines.
The SWA has been campaigning against high duties that restrict Scotch distillers from exporting to India. It says this violates WTO regulations and result in loss of revenue to Indian authorities.
A recent European Union (EU) investigation into the Indian regime found 'blatant violations' of the WTO rules. The system unfairly distorts competition by subjecting Scotch whisky and other imported spirits to a much higher tax burden - of up to 550 percent - than that faced by Indian distillers, the SWA said in a press release.
Following further talks between the SWA and Indian government officials in Delhi last week, Gavin Hewitt, the SWA chief executive, said: 'The EU's determination to ensure a level playing field for spirits and wines in India will be warmly welcomed by Scotch whisky distillers, who continue to face a longstanding discriminatory tariff and tax regime that has been found to be in clear violation of WTO rules.
'It is time for India to implement its international commitments and allow fair access for Scotch whisky, just as Indian spirit drinks have free access to the European market. We fully support referral of the matter to the WTO for formal consultations and hope that India will take this last opportunity to agree to reform its discriminatory duty arrangements for whisky, without the need for a dispute settlement panel being set up'.
WTO consultations aim to ensure international trade rules are respected. If an issue is referred for consultation, there is a formal 60-day dialogue between the parties aimed at resolving the dispute.
If an agreement cannot be reached, a Dispute Settlement Panel - a body of trade experts who consider and rule on the merits of the case - may be established.
An EU report in July 2006 concluded that several aspects of the Indian fiscal regime are contrary to WTO rules, including an 'Additional duty' (25-150 percent) on imported spirits and wine, which distorts competition by unfairly exceeding the taxation of local products.
The EU report concluded that 'the Indian market has remained essentially closed for imported wines and spirits'. This followed a complaint in 2005 by EU spirits and wine producers, including the SWA.
WTO dispute panels have considered three cases in relation to the discriminatory taxation of spirit drinks. On each occasion - in Japan, Chile and South Korea - the WTO is reported to have ruled in favour of the industry's position.
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