European wine and spirit producers are advocating for duty-free imports as part of the potential free trade agreement (FTA) with India. Their goal is to offer Polish Vodka, Champagne, and Irish Whiskey at more affordable prices within the country.
“It is still early in the negotiations as six rounds have been completed. But we would want duties to be significantly reduced in the first year and hope that it is phased out over five years,” said Ulrich Adam, director general spirits EUROPE, an industry lobby group, which was part of a delegation that travelled to India last week.
He proposed with the condition that states should refrain from raising domestic levies to compensate for the price difference.
Similar to the UK, where tariff reductions on Scotch are pivotal, the EU views wines and spirits as a significant component in the discourse on duty reduction. With 2,000 geographical indications (GIs) for wines and 250 for spirits, constituting nearly half of the GI tags in the trading bloc, the EU is also pursuing an agreement on GIs. This would assist its producers by relieving them from the obligation to adhere to food standards in India, among other advantages.
Although a substantial decrease in duties in India, currently estimated at around 150%, is perceived as potentially harmful to the domestic industry, which aims to safeguard its interests, Adam contends that permitting the importation of bulk items into the country will promote domestic bottling and associated activities. He also argues that local producers, specializing in the predominant brown beverages, will not experience significant repercussions from tariff cuts, as white spirits wines have a relatively small share of the market.
“I don’t think so. It’s the price point (for drinks)… It takes time,” Adam said, adding that there is a large shipment of bulk consignments from the EU to the US, where the final product is bottled for the American market.
“It (duty cuts) has worked in other FTAs and it has shown to deliver results… it can act as an accelerator of trade,” he added.