US trade officials said, on Friday, they are mulling whether to continue a world trade court challenge against India after New Delhi said it would drop hefty duties on wine and spirits.
“We are studying India’s recent announcement that it has withdrawn the additional duty on imports of alcoholic beverages,” US Trade Representative Susan Schwab said in a statement.
Ms Schwab spokesman Mr Steve Norton said the Bush administration had not yet decided if it would press ahead with its challenge of Indian duties at the World Trade Organization’s Dispute Settlement Body. Earlier this week, India said it had withdrawn an additional customs duty for the beverages after both the EU and the United States filed challenges at the WTO's Dispute Settlement Body.
Positive step
“Withdrawal of this duty would be a positive step in addressing US concerns,” Ms Schwab said. However, India also increased the basic customs duty on wines to 150 per cent, which puts it on par with spirits and liquor duties.
India has one of the world’s biggest spirits markets, valued at $16.2 billion at the retail level. US officials complain that India’s import tariffs can add up to 550 per cent to the cost of US exports and restrict the growth of US products in India’s lucrative market.