Indian Auto, Wine Duties Hold Up EU Free Trade Agreement

India's free trade agreement (FTA) with the European Union is held up over the issue of lowering import duty on automobiles and wines and spirits with New Delhi insisting that it is unable to reduce tariffs for both products that have a strong domestic lobby.

"We have told them (EU) that we are unable to offer any concessions since we have not included these two sectors in our FTAs," said a government official. Besides, fears of similar demands from other trading partners such as Japan and South Korea, with which India has already signed agreements without cutting customs duty on these products, is holding back any concessions from New Delhi.

"Japan has already written to the government saying that it would want duty concessions for automobiles if the same is offered to EU," said another senior government official involved with the negotiations.