WTO panel on Indian alcohol duty

BRUSSELS, July 16 (Reuters) The European Union has suspended a dispute panel it initiated at the World Trade Organisation over India's additional duties on imported wines and spirits after New Delhi axed the duties this month.

In a bid to break down barriers for its Scottish whisky makers, French vineyards and other drinks producers, the EU launched action at the WTO against India late last year and the United States also challenged the duties.

''The EU welcomes the Indian decision to respond to EU pressure by repealing these discriminatory duties,'' a European Commission spokesman said on Monday, announcing the panel suspension.

''EU wines and spirits exporters deserve a level playing field in India. This decision brings us closer to that goal.'' Brussels says duties in India had ranged as high as 550 percent for imported spirits and 264 percent for wines.

Its decision to take New Delhi to the WTO was part of what European trade chief Peter Mandelson has called a harder-headed approach to fighting barriers to EU exports around the world.

The Commission reiterated its regret that India, despite ending the additional duties on July 3, also raised its basic customs duty on wines by 50 percent to 150 percent, the same level as for spirits.

''The WTO panel can remain in suspension for up to one year.

The European Commission will now continue to monitor the situation on the ground, to make sure that no new discriminations appear at state level,'' it said.

European spirits makers estimate only 1 percent of 87 million cases of spirits sold in India each year were imports, in a market that is one of the largest for Europe.

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