India's government agreed in July 2007 to scale back special taxes on foreign wine and spirits imports after the EU ran out of patience in slow-moving negotiations and turned to the WTO. EU suspended and then withdrew the case while USA stuck on. A few months ago US had lost that case.
What the original case did not consider was tha fact that some Indian states like Maharashtra imposed heavy excise duties calling them special fees. EU claims that this step impedes imports, and the EU is set to return to the global trade arbiter, according to the report in Reuters.
The EU could announce the new action against India at the WTO as soon as next week. Peter Mandelson, spokesman for the EU commissioner confirmed the fresh action but declined to comment on the timing of any move.
"A number of issues remain to be resolved in this case," spokesman Peter Power said. "At this stage, further WTO action is under active consideration."
The EU has been taking a tougher approach to fighting barriers to its exports around the world under a strategy drawn up by Mandelson.
The central government has been pressurising Maharashtra to come up with a policy that proves there is no discrimination. In fact the confusion that is prevailing has resulted in suspension of any business in Maharashtra for imported wines for over 10 weeks causing heavy losses to the importers and the consumers.
Watch this space for latest action. |