Under the agreement, the tax levied on expensive wines coming from Europe will be reduced from 150 percent to 20-30 percent over the next seven years.
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India and the European Union on Tuesday announced the completion of negotiations for a Free Trade Agreement (FTA). An official said that under this agreement, several domestic sectors like apparel, chemicals and footwear will get duty-free entry into the 27-nation European Union. Meanwhile, the European Union (EU) will get access to the Indian market at concessional duty for cars and wine. This agreement, concluded after more than two decades of negotiations, is being called the ‘largest ever’ agreement. It will create a market of approximately two billion people. Under this FTA, India will significantly reduce the tax levied on wine imported from European countries.
Tax will be reduced from 150 to 20 percent
Under the agreement, the tax on high-end wines imported from Europe will be reduced from 150 percent to 20-30 percent over the next seven years. The tax on beer will be reduced from 110 percent to 50 percent, and on spirits to 40 percent. However, there will be no concessions for wines costing less than 2.5 euros. Key EU goods that will receive tariff concessions include vehicles, wine, spirits, beer, olive oil, kiwi and pear fruits, fruit juices, processed foods such as bread, pastries, biscuits, pasta, chocolate, pet food, lamb, sausages, and other meat products. These goods currently attract tariffs ranging from 33 percent to 150 percent.
EU to phase out tariffs on Indian automobiles
The EU will phase out tariffs for Indian automobiles, while India will reduce tariffs to 10 percent for EU cars, subject to a quota of 2.5 lakh per year. Under the agreement, EU goods such as machinery and electrical equipment, aircraft and spacecraft, optical, medical and surgical equipment, plastics, chemicals, iron and steel, and pharmaceuticals will get duty-free access to Indian markets. India will not provide any duty concessions in the dairy (including cheese), soya meal, and cereals sectors.
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