Brussels: The European Commission called on the World Trade Organization on 26 March to referee a dispute over India’s duties on alcohol imports after talks failed, taking a second step towards litigation.
The European Union’s executive arm said it was asking the WTO to set up a dispute settlement panel to rule on India’s import duties for spirits and wines, which can run as high as 550%.
“As we could not resolve our dispute in consultations, the EU sees no other way than to request the establishment of a WTO panel,” said EU Trade Commissioner Peter Mandelson.
“We are, of course, not closing the door to an amicable solution, but the ball is now in India’s court,” he added.
In the first step towards litigation, the EU sought WTO consultations with India on the matter in November, but those talks proved fruitless.
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.
In 2004, the then 25-nation EU’s spirits exports to India amounted to only 23.3 million euros ($30.9 million) while wine exports the same year were worth 4 million euros, according to the EU’s Eurostat data agency.
Those figures are a drop in the bucket compared to the 5 billion euros in spirits the EU exports annually to other countries and annual wine exports worth 4.5 billion euros.