EU wants India to cut tax on wine

The European Union wants India to cut import duties on wine and spirits, Agriculture Commissioner Mariann Fischer Boel said today.

The EU may approach the World Trade Organisation seeking a reduction in Indian duty, Boel told reporters in New Delhi. The South Asian country levies a 280 per cent tax on imported wines and a 500 per cent duty on spirits, she said.

"You have extremely high import tariffs,'' Boel said. "Yesterday, we bought a very good bottle of Indian wine because we could not afford the European one.''

The extra levies prevent European drinks companies such as Diageo and Pernod Ricard from increasing their market share in India, the EU has said. India imported ¤23.3 million ($30 million) worth of Scotch whiskey in 2004, less than 1 per cent of its total market, the EU says.

That compares with shipments last year worth £ 46 million ($82.7 million) to China, where the import duty is 10 per cent, and £370 million worth to the US, the biggest export market for the liquor, the Edinburgh-based Scotch Whisky Association says.