The government is mulling upon reducing the import duties levied on European spirits and wines from 150 per cent to 50 per cent, making Scotch whisky and French wine much more reasonable.
At the moment, the European Union has decided to treat textiles imported from India in the same way as those brought in from developed countries like Bangladesh. It will also permit duty-free entrance of Indian textiles in the common market. Furthermore, sugar and rice exported from India to Europe is also in the under the purview of imposition of lesser taxes.
In the meantime, the government is laying out the outline of an agreement to cut down the import duty on luxury car models like Mercedes, BMW and Audi. Apart from these negotiations, New Delhi is also striving to get permission for the purpose of uncomplicated entry of Indian working professionals into Europe; however, analysts say that the trading rules do not apply for the services sector.
Major reductions, however, is still on spirits, wines and big-size cars that India abstained from since 2007. Now, the Prime Minister himself, has asserted that there will decrease in duties. According to the government, reduction of taxes on items like whisky and wine will not affect the local manufacturers as these products do not have many domestic competitors. An official said, "It is not going to affect the local industry since we do not have the grapes to manufacture the same quality of wine as Chardonnay".
Most local producers are not on the same frequency over the decision of reducing taxes on imported alcohol as it will have an effect on the local market and customers. However, most Indians already buy cheaper whisky and wines from duty-free shops available at all international airports. The agreement with the European Union is set to be finalised by February and will be operational with immediate effect.
Thus, the reduction in import duties would be a significant step in allowing customers to free their hands to a certain extent, at the time of buying.
