Geneva, April 24 - The World Trade Organisation (WTO) launched an investigation on Tuesday into Indian wine and spirit tariffs at the request of the European Union.
The European Union says India is breaking world trade rules with duties which can reach as high as 550 percent on imported spirits such as whisky and 264 percent on imported wines.
EU spirits exports to India in 2005 amounted to just 43 million euros ($57.71 million), despite the Asian country being one of the largest markets in the world, and wine exports were 7 million euros, according to the European Spirits Organisation (CEPS), which represents EU producers.
Indian trade officials, while acknowledging duties are high, have said the issue is difficult to resolve quickly because state governments are responsible for excise duties on alcohol.
The investigation will take some nine months to reach a final verdict.
The probe was automatically initiated by the WTO's Dispute Settlement Body (DSB) because it was the second time that Brussels had made the request. India exercised its right to block the first request.
The United States has also requested consultations with India over what it calls "excessive duties" on wines and distilled spirits, the first step towards seeking a panel investigation.
Also on Tuesday, the DSB established a panel at Argentina's request over a safeguard applied by Chile on certain milk products from Argentina, and one to examine whether Washington had abided by a ruling against anti-dumping measures on Mexican oil industry goods such as pipes and drilling equipment.