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WTO will still investigate India's import duty

Published:  23 July, 2008

The World Trade Organisation will continue its case against India - despite the country slashing its high import duty

EU officials say India has not gone far enough.

Despite removing import duties levied on wines and spirts by removing additional customs duty on the beverages India still hiked the basic customs duty on wine from 100% to 150%.

India also said it would empower state governments to levy taxes on imported products equivalent to the excise duty domestic manufacturers pay.

This has angered the EU, which is awaiting an official word from Indian government on the issue.

Stephen Adams, EU trade commission spokesman, said: "We have to study in detail the Indian action, so it is a bit premature to speak about the suspension of the panel procedure at this point."

"The EC will now continue to monitor the situation on the ground to make sure no new discriminations appear at state level.

"The removal of the discriminatory duties is a good start for European spirit and wine makers, who have been badly disadvantaged by Indian measures for many years," he said.

The EU as well as the US had in separate complaints against India before the WTO said that their wines and spirits attract taxes that aggregate up to 550% even though the country is only entitled to cap the duties at 150% under the WTO agreements.