The Indian government has proposed in its federal budget a 4% 'special additional duty' on imported spirits and wines over and above existing tariffs.

The Indian government said it saw the extra duty as a source of additional revenue rather than a means of protecting the domestic industry.

The overall duty burden faced by imported spirits already ranges from 212% to 525% thanks to India's policy of levying duty at the federal and state level.

The UK's Scotch Whisky Association said yesterday (1 March) that the Indian government had "failed for the second year in a row" to end a "discriminatory import regime for spirits" in yesterday's Budget.

An SWA spokesman told just-drinks today that the association was "seeking clarification" as to whether the additional duty was to be re-introduced.

India had abolished the special additional duty in 2004 after it decided to introduce VAT. However, problems with implementing VAT nationally have led the Indian government to propose the return of the extra tax.