INDIA’S DRINKS TRADE URGED GOVERNMENT TO STAND FIRM AGAINST TRUMP ON TARIFFS
By Siulan Law Mathews DipWSET
Credit: Sebastian Andersson/Unsplash
Ahead of US President Donald Trump's visit to India next week, India’s IANS news agency reported that the Indian alcoholic beverage industry has urged the government not to make concessions on wine and spirits import tariffs.
The Trump administration has been pushing the Modi government to reduce tariffs on American liquor, particularly bourbon whiskey. Indian liquor manufacturers expressed worries that any concession to USA would open a floodgate as European Union would push for the same.
"Ahead of Trump's visit discussions on reducing customs duty have again resurfaced in the Commerce Ministry. If the government gives any concession on US wines and spirits, then it would open the floodgates as European Union would push for similar concessions which we cannot allow to happen. We have been writing to Commerce Minister Piyush Goyal again and again," Vinod Giri, Director General of Confederation of Indian Alcoholic Beverage Companies (CIABC), was quoted by IANS as saying.
In its letter to the Commerce Minister, the CIABC has demanded that any negotiation on duties should proceed with the interests of domestic industry in mind. It said basic customs duty should be reduced to a level which does not create great competitive disadvantage for Indian companies.
“Any immediate and large reduction in duty will be highly detrimental to the domestic industry,” the CIABC said in the letter. “Foreign governments are seeking easy access to Indian markets but deny Indian companies the same in their countries through non-tariff barriers," it added.
The trade body argued that any reduction should be done in a phased manner to allow Indian companies time to strengthen their competitiveness.
“Basic custom duty should be brought down from current level of 150 percent to 75 percent in next 10 years. But before that other countries, particularly the US and EU, should be persuaded to remove non-tariff barriers on Indian products,” Giri was quoted as saying.
“They should accept alcoholic products made in India as per the product description on the label. They should also not insist on any maturity period on liquor products made in India. All that we are seeking is a level playing field for the Indian alcoholic beverage industry," he added.
According to CIABC, India’s liquor trade is very unbalanced. Exports is worth Rs22billion (USD 306million) per annum while imports is worth Rs54b. Exports to US is just Rs500m while imports worth Rs19b, and exports to EU is Rs1.6b and imports worth Rs 8.5b.
It is also said that the industry as a whole has an annual turnover of Rs2.5trillion, and contributed tax worth Rs1.25t to the government.
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