WTO issues ruling in US-India wine dispute

A World Trade Organization appeals panel issued a ruling Thursday in a U.S.-India dispute over tariffs on American wine and spirits, but the decision neither overturned nor upheld an earlier ruling that sided with India.

One legal expert said the verdict allows India to walk away from the case, but could provide the United States with fodder for a new legal complaint.

The 83-page verdict struck down many of the findings from the February ruling, and faulted India for failing to justify the import tariffs.

But it also said the U.S. had failed to produce evidence that India was breaking international trade rules.

"Basically there is no ruling," said Brendan McGivern, a partner at White & Case law firm in Geneva. "Bottom line, India can walk away from this."

"The good news for the United States is it can use some of this language to initiate a new case. I presume it will," he said.

The Office of the U.S. Trade Representative in Washington said it could not immediately comment.

India's basic import duties on foreign wine and spirits reach 150 percent, within WTO limits. However, various government surcharges take the charge up to 550 percent, depending on the Indian state. The state of Tamil Nadu has gone furthest, shutting out foreign alcohol and allowing shops to sell only made-in-India spirits and wines.

The European Union recently restarted a separate WTO complaint against India over the issue.

India is one of the world's largest markets for alcohol with a huge potential to grow, but imports account for only a meager share of total consumption. Brussels and Washington say the tariffs prevent their products from breaking into the market.

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