Indian Government to impose 700% tariff on imported spirits
Whisky producers today called on the British Government to step in over moves by India to impose a 700% tariff on imported spirits.
The Scotch Whisky Association (SWA) said the Indian Government was contravening World Trade Organisation (WTO) rules by deliberately protecting its own distilleries, which enjoy a near-monopoly in the domestic market.
India had been expected to cut its import tariff from 222% to 150% under a commitment to the WTO.
But instead it raised the duty on cheaper spirits, such as gin and whisky to 706%, and that on more expensive brands to 464%.
The SWA said today that the new duties, which do not apply to domestic spirits, breached WTO rules on at least five counts and said it was seeking support from the British Government and the European Commission.
SWA director of internal affairs Tim Jackson said the protectionist policies were counter-productive and would boost India’s already thriving black market.
Although domestic producers account for 99% of the 65 million cases of spirits sold in India per year, only 45% of spirits are purchased legally and duty is only paid on a quarter.
Mr Jackson said: ‘‘The Indian Government is circumventing its WTO commitments to protect its domestic industry, which has long been shielded from international competition.
‘‘But there is already widespread smuggling of imported spirits into the Indian market. The tariff arrangements are ineffective as a means of protecting domestic production and the federal and state governments are missing out on valuable revenue.
‘‘The removal of the import ban when coupled with this significant tariff increase is in reality a smugglers’ charter the only real winner will be the bootlegger.’’
