NASHIK: The demand made by the European Union (EU) to reduce import duty levied on European wine by the Indian government is sending jitters through the domestic wine industry. The Indian Grape Processing Board (IGPB) fears a cut in the duty would harm the domestic industry.
Following the EU demand, the central government is planning to reduce import duty on wine from the current 150 per cent to 40 per cent.
Maharshtra is wine country: out of a total 93 wineries in India, 75 are in the state. There are 36 wineries in Nashik, 12 in Pune, 13 in Sangli, five in Solapur, four in Osmanabad, three in Buldhana and one each in Latur and Ahmednagar. The annual turnover for the industry is around Rs 450crore, with over a crore litres of wine sold in a year.
"If the central government reduces import duty on European wine and prices dip below the cost of production of indigenous wine, it would destroy the domestic wine industry," IGPB chairman Jagdish Holkar told TOI, "The central government must keep in the mind that the domestic industry should not be affected with changes to the import duty. The duty should be reduced only for high-end, premium wine."
"Our joint delegation, along with the office-bearers of the All India Wine Producers' Association (AIWPA), met Union agriculture minister Sharad Pawar and apprised him of the issue. Pawar has assured us that he would look into the matter," Holkar added.
"Such a high reduction in import duty on wine, from 150 per cent to 40 per cent, will affect the business of Indian wineries to a large extent. We are just coming out of a recession that had badly affected the industry in 2008 and 2009. Our primary objective is to protect the domestic industry. We are against this reduction. We have sent a memorandum to Sharad Pawar and have urged him to take a call on this issue. We are also approaching the ministry of commerce," said Shivaji Aher, president, AIWPA.
The domestic wine industry holds a roadmap to the food processing industry in the country. "The central government has started focusing on processing of agricultural goods, taking into consideration that value-addition cannot happen without this process. At present, only 4 per cent of agricultural goods are being processed in the country. At this juncture, how will you support the food processing industry, if there's a reduction on import duty?" Holkar questioned.
Source : timesofindia.indiatimes.com