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Alcohol row: EU sets deadline for India

European Commission calls on India to bring down obstacles to wine and spirits exports or face a case at the WTO.

india Updated: Nov 10, 2006 10:44 IST

The European Commission set India a deadline of just over a week to start dismantling what Brussels sees as unfair barriers to wine and spirits exports or face a case at the World Trade Organisation (WTO).

"We are moving towards formal consultations (at the WTO) with India," said Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson, adding that Brussels had given New Delhi until November 17 to address its concerns.

Mandelson will be visiting India on that date.

"However, our door remains open to India if it wishes to come forward," he said.

The European Union's executive Commission has long called on India to bring down obstacles to imported wine and spirits.

A Commission report earlier this year, prompted by complaints from European producers, said there were "clear violations of WTO provisions" in some Indian states.

The combination of duties and taxes were as high as 550 per cent on imported spirits and 264 percent on imported wines, the report said.

David Williamson, a spokesman for the Scotch Whisky Association, said European wine and spirits producers had run out of patience with India for not moving on the issue.

"We have worked for years look for fair market access in India," Williamson said. "We would welcome a request for formal discussion with India on its failure to address its discriminatory tax system for imported spirits and wine."

Indian trade officials have said they are aware of the concerns of the EU but the issue is difficult to resolve because state-level governments in the country are responsible for excise duties on alcohol.

Starting consultations is the first step of resolving a dispute at the WTO, before a formal dispute settlement panel is set up which can lead to retaliatory duties being authorised.

Mandelson has said he will adopt a more "hard-headed" approach to trade issues than his predecessors as he tries to open up new markets for European companies.

The EU, in coordination with the United States and Canada, earlier this year launched proceedings against China in a dispute over Chinese tariffs for auto parts.

Mandelson is also due to discuss ways of reviving the WTO's stalled Doha round of negotiations to reduce barriers to global trade when he visits India next week.