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Monday, 16 April, 2001, 14:27 GMT 15:27 UK
Row brewing over 700% duty
Whisky bottles
Whisky exports are key to the industry
The Scotch Whisky industry is calling on the UK Government to intervene in a row over plans by the Indian government to impose a 700% tariff on imported spirits.

The Scotch Whisky Association (SWA) claim India is operating a protectionist policy and is in breach of World Trade Organisation (WTO) rules.

The SWA said the new duties, which do not apply to domestic spirits, breached WTO rules on at least five counts.

India had been expected to cut its import tariff from 222% to 150% under a commitment to the WTO.

Whisky in a glass
Local brands have a monopoly
However, it has instead raised the duty on spirits like gin and whisky to 706%.

SWA director of internal affairs Tim Jackson said the policies were counter-productive and would boost India's already thriving black market.

Although domestic producers account for 99% of the 65 million cases of spirits sold in India per year, only 45% of spirits are purchased legally and duty is only paid on a quarter.

Mr Jackson said: "The Indian Government is circumventing its WTO commitments to protect its domestic industry, which has long been shielded from international competition.

"But there is already widespread smuggling of imported spirits into the Indian market. The tariff arrangements are ineffective as a means of protecting domestic production and the federal and state governments are missing out on valuable revenue.

'Smuggler's charter'

"The removal of the import ban when coupled with this significant tariff increase is in reality a smugglers' charter - the only real winner will be the bootlegger."

Mr Jackson said the SWA was seeking support from Westminster and the European Commission.

Figures released last week showed that worldwide exports of Scotch whisky rose by 3% last year to more than 2bn.

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See also:

12 Apr 01 | Scotland
Whisky bosses bullish over exports
02 Apr 01 | Scotland
Drambuie plant to shut in merger
07 Mar 01 | Scotland
Whisky leads mix of Budget reaction
09 Jan 01 | Scotland
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Industry plea for whisky cuts
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