The Indian central government is urging state governments to consider imposing the same taxes on imported grain-based alcohol and wine as those used for similar products coming from other states within India.

The government feels level taxes are "necessary to ensure a level playing field for all makers of grain-based alcohol and wine," sources in the department of food processing told India's Business Standard.

The move is linked to the proposed removal of quantitative restrictions (QRs) on the import of alcohol under a WTO agreement. It was noted by the central government, that at present products produced by domestic industries have to pay various levies that imported products do not attract.

The Business Standard cites the example of domestic wines produced in Maharashtra compared to imported wines, which do not have the same taxes, and says: "A scrutiny shows that the structure gives an unfair advantage to the imported products."

The central government is also still considering a "liberal" licensing regime for imported and manufactured liquor to provide adequate cover to the domestic industry against what it fears will be an influx of bottled foreign liquor after QRs are removed.