French wine flowing into India despite duty row

NEW DELHI: The high duty India levies on wine and spirits maybe a sore point in trade relations with the European Union, but that did not stop France from stepping up wine exports to the subcontinent nation in 2006.

France's wine exports to India increased 35 per cent and accounted for the maximum in terms of value among the categories of food products shipped to India.

Overall agricultural and food products exports from France to India jumped by 717 per cent to 67 million euro in 2006 against 8.2 million euro in the previous year, French Minister for Agriculture and Food Nicolas Forissier said.

Imported wines and spirits are taxed at highs of 264 per cent and 550 per cent in India and EU and the US have asked New Delhi to reduce the tariffs.

Though Commerce and Industry Minister Kamal Nath hinted at reducing the tariff, the US has informed of its decision to go to WTO with a complaint against India while the EU has already filed a complaint and has threatened to press for a dispute settlement panel to begin litigations.

Two-way agriculture trade between India and France is estimated to be worth 117 million euro. However, Indian agricultural and food export to France went up by 8.7 per cent to 50 million euro from 46 million euro in the review period.

Forissier, who was in India leading a dozen-odd French firms, also said investement is more important than trade.

"I am here to facilitate setting up of French food processing small and medium enterprises in India," he said.

Forissier said there are a number of other French products which have increased their presence in the Indian market.

The French Food Minister said his country was working on a long-term plan to boost trade and investment between the two countries.

The India-France joint committee at the government level would facilitate more trade, Forissier said.

There are about 24 French companies in food sector that have opened their offices in India and more are likely to come, he said.

There were eight companies in Forissier's team, who were visiting the country for the first time and were serious about their India plans.

The Minister said his country was looking at opportunities in speciality food products and equipment such as those used in slaughter houses.

Back home, his priority would be on imparting more information to French companies about opportunities in India, he said.

India's desire to grow in agri-business depends on improving its supply chain and cold chain among other factors, he said, adding: "You have huge potential which is not fully utilised."