U.S. targets India over spirit and wine tariffs

The Bush administration filed a case with the World Trade Organization against India on Tuesday concerning the tariffs the country imposes on U.S. wine and distilled spirits.

The case claims that India is imposing tariffs that go as high as 550 percent on U.S. wine and spirits imports and is in violation of its WTO commitments that they would not exceed 150 percent.

Both of India's wine and spirits import duties are within WTO limits -- wine at 100 percent and spirits at 150 percent -- however various government surcharges boost the tariffs much higher.

The matter may possibly be resolved in WTO consultations.

The U.S. and India have 60 days to strike a solution through negotiations before a WTO panel is formed. If the United States wins the case it can put penalty tariffs on goods coming from India into the States unless India drops the tariffs in dispute.

The announcement from the administration came after the European Union also challenged India's tariffs on wine and spirits.

An attempt by the administration to join the EU case was rejected by India. Under WTO rule a member country that isn't allowed to join a existing case can file its own.

India is one of the largest spirit markets in the world -- valued at the retail level at about $14.2 billion.

-Dippold

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