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EU to request WTO to set up a dispute panel on India's import duties on alcohol

Brussels, 26 March 2007. The EU has notified the World Trade Organisation that it intends to request the establishment of a dispute settlement panel to rule on the legality of India's import duties for wine and spirits.

A dispute settlement panel is the second step in the WTO dispute settlement. The Commission has decided to take this step after the talks held with India last December failed to resolve the dispute .

In the first step towards litigation, the EU launched formal consultations with India last December, after a Commission investigation revealed that India's duties on alcohol imports are in violation of India's obligations under the WTO.

The Commission began probing India duties on European wine and spirits in September 2005 after receiving complaints from EU producers, for whom India represents a potentially huge market.

On top of the federal Basic Customs Duties (of 150% for spirits and 100% for wines), India levies Additional Duties on imported spirits and wines which raise the cumulative federal duty burden to between 264% and 550% (depending on the import price of the products). although according to New Delhi's WTO commitments, they should not exceed 150 per cent.

The United States has also asked for dispute settlement consultations at the WTO with India.

"With its fast-growing middle class, India could be an important export market for American wines and distilled spirits if not for these layers of duties," said US Trade Representative Susan C Schwab in the statement.

Latest developments:

10 April. India blocked a WTO investigation of its import duties on European wine and spirits, temporarily delaying the dispute that could also soon involve the United States.

Commission press release: EU to request WTO panel on India's import regime for spirits and wines

Press articles

Reuters: EU escalates India drinks trade dispute at WTO

EurActiv: Europe takes India alcohol dispute to WTO