The European Union has threatened to take India to the World Trade Organisation over the country's taxes on wines and spirits.

The European Commission, which argues India's duty regime breaks its WTO commitments, has said it will give New Delhi until Friday (17 November) to promise it will liberalise - or it will lodge a request for formal talks with India. Such negotiations are the first stage of a disputes proceeding at the WTO.

If talks with India fail to meet the EU's demands, then Brussels is likely to push for WTO arbitration. Indian drinks tariffs are notoriously high and have been a major target of the suspended WTO Doha Development Round.

The Scotch whisky industry, for example, has been a fierce critic of India's duty system, where a tax of up to 550% can be levied on a bottle of Scotch.