Fissures have emerged between the finance and commerce ministries on the issue of high import duties on wines and spirits, with the commerce ministry today expressing disappointment at the absence of any cuts in this year’s budget. “We are disappointed that there was no cut in import duties on wine and spirits. The high level of duties will hamper our negotiating ability at WTO as the issue will keep coming up again and again,” said Commerce Secretary G K Pillai on the sidelines of an interactive session on WTO Negotiations in Agriculture, organized jointly by Ficci and the European Commission. European wines and spirits attract duties ranging from 264 to 550 per cent in India. “At least the countervailing duty on wine and spirits should have been lifted,” Pillai said. The ministry had earlier met the empowered group of state finance ministers to lift the countervailing duty as the states had agreed to impose a duty equal to excise on domestic liquor. This duty had been imposed to bring parity between imported and domestic liquor. The EU has asked India to cut duties to the basic tariffs permissible under WTO and has even threatened to go in for litigation. “I am in favour of negotiation rather than litigation, but we are disappointed that the budget did not take any action on that,” said the European Commissioner for Agriculture and Rural Development, Mariann Fischer Boel. “There is a possibility of starting a dispute settlement panel in WTO to address the issue. I am hopeful that we would be able to put our point across during negotiations.” EU has been pressing for abolishing additional duty imposed by India on wines and spirits. According to an EU investigation report, India is violating WTO provisions in doing so. Commerce minister Kamal Nath last week said that EU should also bring down import duties on Indian whisky and there should be reciprocation of actions on both sides. “It will be discriminatory to allow their wines and spirits while our whisky attracts high import duties,” Nath said.
