India, Wine, and Taxes

Filed in archive Wine News on March 15, 2007

I've been seeing this reported all over the web the last few days concerning the outrageous tariffs on wine imported by India. I know that there are kind of taxes and duties and what-not added to products when imported and exported, but I can understand why U.S. wine makers are keeping an eye on this issues. From India Taken to Task Over Wine, Liquor Tariffs, to say that the tariffs are on the high side is a major understatement:

The US asked the World Trade Organization (WTO) to help settle a row over the heavy duties India charges on wine and liquor imports.

Through a combination of duties, India's tariffs on wine and distilled spirits can add up to 550%, although according to New Delhi's WTO commitments, they should not exceed 150%, according to a statement issued by the Office of the US Trade Representative.

"With its fast-growing middle class, India could be an important export market for American wines and distilled spirits if not for these layers of duties," said USTR Susan schwab in the statement.

The US has asked for dispute settlement consultations at the WTO with India.

Consultations are the first step towards resolving a dispute at the global trade body before a special arbitration panel is set up.

"We have raised this issue with the government of India on several occasions over a number of years. We hope the matter can be successfully resolved in WTO consultations," Schwab said.

Three months ago, the European Union asked for WTO consultations over the wine and spirit duties in November last year.

India rejected a US request to join the consultations with Europe as a third party, the US embassy said, leading the USTR to file a separate request.

With a growing middle class, India is considered an important emerging market for US wine, although high duties have suppressed sales there to date.