Tuesday, July 27, 2021

Negotiate one sip at a time.

"Post-Brexit, the UK is now positioned to strike a deal with India on its own rather than as a part of a large trading bloc. The EU itself is more amenable to a trade deal with India today than it was eight years ago as it seeks to diversify supply. Yet, it will take longer for India and the EU to resolve outstanding issues than for India and the UK to hammer out a trade deal," wrote Puneet Kumar Arora. "The two countries would also aim to reduce tariff and non-tariff barriers that are holding up the trade potential between the two economies." Will the Indian government give up its greed for exorbitant taxes? "The UK hopes India will sharply cut its 150% basic customs duty on scotch whiskey under a free-trade agreement (FTA) that is in the works," wrote Asit Ranjan Misra. "Holding that British businesses still face significant tariffs when selling their goods overseas, the report said scotch whiskey is subject to a tariff of 150% when entering India and 60% in Thailand." The British do not know our cunning. "India's move to cut import duty on alcoholic beverages in the Budget while simultaneously imposing an Agriculture Infrastructure and Development Cess (AIDC) of equal measure may have been taken anticipating demand by UK and the European Union to lower tariffs on alcoholic beverages under future FTAs." Whether the British be fooled by this sleight of hand remains to be seen but we have to remember that they ruled India for 200 years and the law of sedition under Section 124A, so loved by the government, was enacted by the British in 1860, Hindustan Times (HT).  "Like the defenders of British rule, its fiercest detractors assume it was an effective system of government - they just think that its power was malevolent, not benign," BBC. That is not correct. "For 200 years, from the mid 18th Century to independence and partition in 1947, the British presided over a regime that was chaotic, violent, driven by uncontrolled passions and profoundly wracked by anxiety." Not much has changed, it seems. The government will never reduce tariffs on scotch because then it would have to reduce exorbitant taxes, which were further increased in this year's budget, on local brands, cleartax. "The share of cesses and surcharges in the gross tax revenue of the Centre has nearly doubled to 19.9 percent in 2020-21 from 10.4 percent in 2011-12" which the Centre does not share with states, Economic Times (ET). Deprived of revenue, the states levy eye-watering taxes on alcoholic drinks. "In fact, the state government gets as much as Rs 85 via taxes out of every Rs 100 spent by a buyer on liquor," CNBCTV18. "The past few months have shown how the global economic engine can help keep the Indian economy afloat at a time when domestic demand remains weak," Arora. "After all, the government's own economic survey (2019-20) show that FTAs have on average boosted rather than harmed Indian exports." "While Globalization 1.0 was touted as the outcome of a consensus-based global decision-making model under the WTO, developed countries were the rule-setters of this game and developing countries were rule-takers," wrote Pradeep S Mehta. "Now the world's seven richest countries have decided that it is time for taxation reform. They have set a global minimum corporate-tax rate of 15% without consulting other countries. Also, never mind that the taxation criteria is quite complicated and applicable only to a part of their profits, and comes on the condition of developing countries surrendering their right to impose digital taxes. The UK is one of the Group of Seven (G7) nations, wikipedia, and organised this year's summit under its presidency from 11-13 June. Australia, India, South Korea and South Africa were invited as guests. The US has been investigating digital services tax imposed by Austria, India, Italy, Spain, Turkey and the United Kingdom because it thinks that they target American companies,"The Indian Express. The US has suspended tariffs on Scotch whiskey as the two nations negotiate a trade deal, BBC. Waters are really muddy. Lots of chances to slip between a sip and the lip.            

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