Washington: The US on Friday filed a complaint at the World Trade Organization (WTO) against India, saying India’s duties on alcoholic beverages and other imports violated global trade rules.
The US action follows a similar complaint lodged by the European Union (EU) earlier this year at the Geneva-based WTO.
“India is an important export market for US products and the United States and India have successfully worked on a number of important trade issues. However, we believe the layers of customs duties India applies to USproducts, in particular to wine and distilled spirits, are not in line with its WTO commitments,” said US trade representative Susan Schwab in a statement.
“We are disappointed that WTO consultations failed to resolve our concern with the duties and that we must resort to a WTO panel. The United States will continue to work towards a resolution of this issue with India but we must ensure a level-playing field for US products around the world,” her statement added.
US officials said India, on top of its basic customs duties, imposes an additional duty of 20-75% on the value of imports of beer and wine and 25-50% on imports of distilled spirits. Moreover, India applies an “extra additional duty” on these imports that puts the total duties in a range of as much as 150% to 550%.
US officials said that in the WTO, India committed that its tariffs on beer, wine and spirits would not exceed 150%.
The additional duty and extra additional duty also apply to other US exports to India such as dairy products and, in some cases, also result in customs duties that exceed India’s WTO-pledged rates.
In April, WTO agreed to take up EU’s complaint on Indian import duties on wines and spirits. The US, Chile, Australia and Japan will participate in that dispute as third parties.
EU argued that combined duties and taxes range from 252% to 550% on spirits imported into one of the world’s fastest-growing markets, and from 177% to 264% on wine imported into India.
Commerce and industries minister Kamal Nath in March did acknowledge that tariffs were high. However, he added that India remained committed to resolving the issue through negotiations.
PTI has reported that the Centre expected to pass legislation cutting the duties.