Brazil urges India to cut import taxes on chicken products

By Mayank Bhardwaj
FILE PHOTO: Brazil's Agriculture Minister Tereza Cristina Dias speaks during a news conference at the Itamaraty Palace in Brasilia

By Mayank Bhardwaj

NEW DELHI (Reuters) - Brazil wants India to cut its import taxes on chicken and chicken products so it can cash in on India's burgeoning demand for poultry and poultry products as incomes rise and food habits change.

India imposes a 100% import tax on chicken products and a 30% duty on whole chickens, too high for countries such as Brazil and the United States to gain a foothold in the market, where the poultry industry is growing at more than 10% a year.

"We would like to urge India to lower its tariffs on chicken and chicken products which are far too steep," Brazilian Agriculture Minister Tereza Cristina Dias told Reuters during a visit to India.

Brazil would also like to import an array of goods from India, she said.

"Our trade ties can be a win-win situation for both countries as we're equally keen to import from India and offer any technical know-how that India might look forward to," Dias added.

Other than Brazil, the United States also wants India to lower its import duties on chicken -- a request that has unnerved the domestic poultry industry which is opposed to any cut in the tariffs.

Brazil would also like to work with India in the area of ethanol production which in turn would help New Delhi use more ethanol blends of gasoline, she said.

Sugar output has surged in India which two years ago surpassed Brazil as the world's top producer of the sweetener, accentuating the need to use more cane for ethanol production.

Unlike Brazil, biofuel production capacity is limited in India.

Asked if the Brazilian delegation discussed the issue of India's sugar subsidies, Dias said: "We have not talked about sugar at all. The issue is already at the WTO."

Brazil has said India's subsidies for sugar exports were not in line with the World Trade Organization (WTO) rules and would hurt free competition in the global market. Other than Brazil, Australia and Guatemala have also questioned the subsidies at the WTO.

India, struggling with surplus sugar supplies, has approved a subsidy of 10,448 rupees ($145.58) a tonne for exports in the 2019/20 season - a move that encouraged mills to clinch overseas sales deals early this year.

(Reporting by Mayank Bhardwaj; Editing by Alexandra Hudson)