India ready to resume free trade agreement talks

A government official has hinted that India may be ready to resume free trade agreement (FTA) talks with the EU, which could lead to lower taxes for imported spirits.

An Indian government official has hinted the country may be ready to resume free trade agreement talks with the EU

FTA negotiations with the EU began in 2007, but talks came to a standstill in April 2013.

Now, India feels it is in a greater negotiating position after parliament approved raising the foreign investment cap in the insurance sector to 49% from 26%, which was a key requirement of the EU.

However, reports by the India Times suggest the Indian government is willing to take a “flexible approach” on spirits taxes and keen to resume FTA talks with the EU and is awaiting a “formal proposal”.

“The individual member-countries have asked the commerce and industry minister to restart talks on FTA, but we are still waiting for a formal proposal from their side,” said a government official, as reported by the India Times.

“Our position has changed slightly since April 2013. We can take a flexible approach on wines and spirits, since many of our breweries have been brought over by the UK or French.”

Duty on imported spirits currently stands at 150% and further state tariffs and taxes are also applicable throughout the country, but the EU would like to see customs tax reduced to 0% over a five-year period.

India’s high spirits taxes have burdened the drinks industry for years, but after a new government was elected into power last year, it sparked fresh discussions among producers about a potential tax relief.