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Any import duty cut on alcoholic beverages must be gradual: Industry body

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New Delhi, Oct 1 (PTI) Apex body of the Indian alcoholic beverage industry, CIABC, on Thursday urged the government that any reduction in import duty in the sector should be gradual and in a controlled manner with a view to provide reasonable protection to domestic firms.

Proposing a bilateral free-trade agreement, Commerce and Industry Minister Piyush Goyal last month stated that India is open to discussing import of scotch whiskey from the UK in a larger measure.

In a letter to the minister, the Confederation of Indian Alcoholic Beverage Companies (CIABC) has urged the government not to 'go ahead' with any proposal to reduce basic customs duty (BCD) on alcoholic beverages imported from the UK.

'India is considering reduction in the BCD on alcoholic beverages as part of its negotiation with the UK.

Any reduction in BCD must be gradual in a controlled manner in order to provide reasonable protection to Indian companies against predatory imports, give level-playing field against western firms, and help Indian products achieve global scale and success,' it said.

The Confederation added that not doing so will have a disastrous impact on the Indian industry and would lead to great loss to Indian farmers and cause massive unemployment.

Stressing that the Indian alcoholic industry was not against reduction in BCD, CIABC Director General Vinod Giri said that the industry is urging the government to ensure a level-playing field.

'Any reduction in BCD should be done in a phased manner to allow Indian companies time to prepare and build their own competitiveness,' he said.

He demanded that the duty should only be reduced to a level in line with average prevailing duties in ASEAN countries.

'To prevent dumping and predatory pricing against mainstream Indian products, products below a certain import price (threshold import price) should be taxed at the threshold import price rate only irrespective of actual import price,' the confederation said.

It said the European Union and the UK should be persuaded to cut non-tariff barriers imposed on Indian products.

'They should accept alcoholic products made in India... They should not insist on a minimum maturity period on Indian liquor products,' it added.

Giri said that when the industry is already going through a tough phase in view of COVID-19 pandemic, the government should avoid taking such decisions to cut duties which are detrimental to the growth of the industry.

'Indian industry needs support from the Government to help grow into a globally competitive force. We need protection against dumping and time to prepare itself against the unfair competitive structural advantages that large Western firms enjoy,' he said.

He also said the Indian industry's attempts to create a global market for its brands are resisted by the same countries that seek easy access to the domestic market.

He alleged that many countries apply various non-tariff barriers to Indian made products.

'Like, the definition of whisky under EU regulations has been tailored to clearly exclude Indian products. Even suggestions to introduce a separate class called 'Indian Whisky' have not been accepted by them,' he said. PTI RR HRS