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Fri, Jul 06, 2007 - Page 10 News List

India lifts heavy duties on alcohol

AP , NEW DELHI

The Indian government has lifted the massive taxes it imposed on imported wines and spirits, bowing to heavy pressure from the US and Europe.

India will relent on the additional duties it charged on wine and spirits -- up to 540 percent in some cases -- that Washington and Brussels are challenging at the WTO, Indian Finance Ministry spokesman B.S. Chauhan said.

But India will keep in place its basic import duties on wine and spirits, which range from 20 percent to 150 percent. The basic duty on wines will increase to 150 percent from 100 percent, a government statement issued on Tuesday night read.

The EU, which is challenging India's import duties on wine and liquor at the WTO, welcomed Delhi's intention to repeal the various government surcharges that make Indian tariff levels on products ranging from Finnish vodka to French cognac among the highest in the world.

But EU officials said they regretted that India appeared set to raise its normal duty on wine to 150 percent from 100 percent, even if the new rate was still within its WTO limits. They said it was too early to speak about whether Brussels would suspend its WTO case.

The US, which also filed a WTO case against the government surcharges, remains "hopeful that India will meet its WTO obligations in this area," said Stephen Norton, a spokesman for the office of the US Trade Representative in Washington. He declined to comment further.

The Distilled Spirits Council of the US said the change would benefit liquor exporters, but hurt wine exporters.

"While it is good news, it's not great news," spokesman Frank Coleman said, adding that a major question remaining was when India would implement the changes. "I don't think anybody is cracking their special bottle of single barrel bourbon just yet."

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