has succeeded in blocking an investigation by the WTO
on its import duties on American wines and spirits,
temporarily delaying a US government complaint over
allegations that Indian rules discriminate against products
such as Napa Valley wine and Jack Daniel''s whiskey.
Geneva-based WTO is currently reviewing a European complaint
on restrictive tariffs on wines and liquors from a number
of state governments in India.
second investigation by a panel to examine a similar
complaint from the US is expected to be established
at a meeting later this month of the WTO''s dispute settlement
body as under WTO rules, a second request for a formal
investigation is automatically approved.
case can result in punitive sanctions being authorized,
but panels take many months, and sometimes years, to
reach a decision.
is unclear if the U.S. and the EU will seek to become
co-complainants by combining their separate WTO cases.
trade representative Susan Schwab said last month while
announcing its intention to seek litigation, "The
layers of customs duties India applies to US products,
in particular to wine and distilled spirits, are not
in line with its WTO commitments. We must ensure a level
playing field for US products around the world."
basic import duties on wine are 100 per cent, while
the tariff on spirits is 150 per cent, both within WTO
limits. However, various government surcharges take
the tariffs up to levels reaching as high as 550 per
cent, depending on the state the imports are bound for.
Nadu goes further by shutting out foreign alcohol and
allowing shops to sell only Indian-made spirits and
the other hand, China adds on only a 10 per cent charge
on foreign liquor, while the US, the EU and Japan, allow
nearly all spirits to enter their markets duty-free.
is one of the largest markets for alcohol in the world
and has huge potential for growth.
US said wine sales in India through special duty-free
rules, such as at airports and luxury hotels, grew by
350 per cent between 2000 and 2005. The growth was 200
percent for American liquors.
high import duties imposed on the vast majority of American
wines and spirits means total exports remain low, the
US says. The Distilled Spirits Council of the United
States estimates that all foreign liquors together account
for less than 1 per cent of the Indian market.