The EU had previously filed similar complaints before the international regulator for India’s excessive restrictions and tariffs on wine and liquor.
The US decided to file an official claim before the World Trade Organisation (WTO) against the system governing wine and spirits imports to India. The Americans, as the Europeans before them, believe the current tariff system obstructs foreign producer’s access to Indian markets.
On May 25 the US called for the establishment of an arbitration committee with India before the WTO, in the belief that the Asian country’s tariffs applied to imports, in particular of wines and spirits, is counter to WTO commitments.
In early March the US called for consultations within the WTO in an attempt to resolve the issue, thus taking the first step in a procedure that could lead to a claim. The EU initiated a similar action in November, challenging the high tariffs applied by India on imports of wine and spirits. On October 24 the WTO agreed to establish a special group within 45 days, charged with resolving the conflict between the EU and India.
Both Brussels and Washington challenge the application of a hefty additional tariff to imported wines and liquors, which is right at the top of the allowed bracket; i.e., 150 percent for liquors and 100 percent for wines. Effectively, rates are even higher, with the accumulated federal tariff reaching between 177 and 540 percent, depending on the product’s price.
The fast-growing Indian market is one of the world’s most significant and most promising, with an annual turnover of 87 million crates (9 litres each) for spirits and 667,000 crates for wine.
[Source: Wines of Spain]
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