The US has stepped up its action against India for what, it claims, are illegally high liquor tariffs by requesting the establishment of a WTO disputes panel, on May 25, 2007. Earlier, on March 6, 2007, it sought consultations with India on the taxes.

A WTO disputes panel was established in April to examine a similar complaint by the European Union (see earlier report ‘WTO disputes panel to hear EU complaint on Indian liquor tariffs’).

The US claims that India is levying additional charges on imported wine and spirits, which push total taxes to as high as 550%. This is way above the country’s bound tariff ceiling of 150%.  

“We believe that 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,” said US Trade Representative Susan Schwab. “We must ensure a level playing field for US products around the world.”

India has said that it is willing to negotiate on the issue, but has made no concrete proposals. Indian press reports, however, suggest that New Delhi may slash liquor and wine taxes within a month.