India on Friday termed as “discriminatory” the attitude of the World Trade Organisation (WTO) towards allowing Indian whisky to be sold abroad.
“They (European nations) do not let Indian whisky be sold abroad because it is made of molasses and not malt. But the point is that it is the British who started producing whisky in India through molasses — not us,” Commerce and Industry Minister Kamal Nath said. “So, why are our products discriminated against?”
Nath said that the government is negotiating the issue with the Geneva-based world trade body and was hopeful it would be resolved soon.
That said, the government is addressing the issue of high taxes on wines and the spirits imposed by state governments. “The finance commission is addressing the issue,” he said.
The domestic industry felt that reduction in state taxes would be a step in the right direction, but the issue should not be mixed with the WTO’s definition of whisky.
“The central government should remove it from the state excise so that rationalization can be brought about,” said Sidharth Banerjee, MD, Kyndal India, distributor of wines, whisky and liquors.
In July last year, India withdrew the additional customs duty on imported wines and spirits in a bid to resolve the impasse with the EU and other leading trading partners over high duties.
A European Commission study had reported the medley of taxes and duties in some States in India was as high as 550 per cent on imported spirits and 264 per cent on wines, though basic import duties on wine and spirits were 100 per cent and 150 per cent, respectively.