Wine makers want protection because the sector is young

Reuters report

Indian drinks firms do not oppose lower tariffs and taxes on imported wines and spirits, but want some concessions so they can compete with bigger rivals in the country's fast-growing $1.8 billion alcoholic drinks market.

India's basic import duties on wine and spirits are 100 percent and 150 percent, within WTO rules, but some federal and state-level taxes can push tariffs above 500 percent, prompting the European Union to press for cuts.

High tariffs mean most Indians can only afford cheaper local drinks, splashing out on foreign wines and whisky only on special occasions or when travelling abroad.

Faced with sluggish home markets, foreign firms are eyeing India, where rising incomes and more liberal attitudes to drink, especially in urban areas, are fuelling a consumption boom.

"We can go ahead with tariff cuts, but we are against allowing imports of cheap wines," said Arun Shah, a director of wine maker Chateau Indage Ltd..

"We believe the industry needs some protection because it is so young," he said, adding wine makers do not want India to allow imports of wine that cost below $10-$12 a case.