Indian tariffs on US wine under WTO scanner

POTSDAM: The World Trade Organisation decided on Wednesday to examine US claims that Indian import duties unfairly discriminate against American wines and spirits.

The WTO launched its investigation after the United States made a second request for the Geneva-based trade referee to rule on the Indian fees applied to products such as Napa Valley wine and Jack Daniel's whisky, trade officials said.

Under WTO rules, the establishment of an investigative panel can only be delayed once. India blocked Washington's first request at the WTO's dispute body earlier this month.

Top US and Indian trade officials meeting in Potsdam, Germany, for global commerce liberalization talks were unavailable for comment.

India's 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 level reaching as high as 550 per cent, depending on the Indian state.

The state of Tamil Nadu goes further still, shutting out foreign alcohol and allowing shops to sell only Indian-made spirit and wines.

The United States, the European Union and Japan, by contrast, allow nearly all spirits to enter their markets duty-free. China tacks on only a 10 per cent charge on foreign liquor.

The WTO is already reviewing European legal challenge of wine and liquor restrictions in a number of Indian states.