GENEVA, April 24: The World Trade Organisation agreed on Tuesday to take up the European Union's complaint on Indian import duties on wines and spirits, a WTO spokesman said.

A meeting of the WTO's Dispute Settlement Body here decided to set up a panel to examine and rule on the dispute following a second request from the EU.

India's blockage at a meeting nearly two weeks ago was automatically waived under WTO rules, the spokesman said.

The European Union is challenging combined duties and taxes that range from 252 to 550 per cent on spirits imported into one of the world's fastest growing markets, and from 177 to 264 per cent on wine imported into India, according to Brussels.

“This is a long standing issue and of very serious concern to the EU,” the 27 nation European bloc said in its statement to the meeting, arguing that the aggregate duties exceeded those declared by India to the WTO.

India described talks with Brussels as “constructive, fruitful” and said it was “disappointed” by the EU's decision to pursue the complaint.

“We are confident that the panel will find the measures are consistent with India's WTO obligations,” the Indian statement to the meeting added.

Indian Commerce Minister Kamal Nath recognised last month that tariffs were high and said that his country remained committed to resolving the issue through negotiations.

The Press Trust of India reported earlier this month that the Indian government expects to pass legislation cutting the high drinks duties before the WTO can complete its investigation into the levies.

WTO experts normally take about six months to produce their verdict once the panel is appointed.

In 2004, EU wine and spirits exports to India amounted to just 27.3 million euros ($36.7m), out of a total EU export market worth 9.5bn euros, according to the EU statistics agency Eurostat.

But India's 1.1 billion strong population and fast-growing middle class, represent a potentially huge market for both European and US wine and spirits exporters. —AFP