The European Union (EU) has asked the World Trade Organization to intervene in its attempts to open up the Indian market to wine and spirits exports.
Foreign imports represent under 1% of Indian spirits consumption
India is one of the world's largest alcohol markets but European producers say they face customs duties of up to 550% for spirits and 264% for wines.
The EU's executive body, the European Commission, wants the WTO to oversee a formal consultation with India.
If talks fail, the EU could ask a WTO panel to resolve the dispute.
The key issues are the "additional duties" and "extra additional duties" levied by Indian states on wines and spirits.
Producers say that these taxes make it virtually impossible to break into the Indian market when combined with an already high federal basic customs duty of 150% for spirits and 100% for wine.
"It is time for India to implement its international commitments and allow fair access for Scotch Whisky, just as Indian spirit drinks have free access to the European market," said Gavin Hewitt, chief executive of the Scotch Whisky Association.
The European Spirits Association said Indian drinkers consume 87 million cases of spirits, of which less than 1% are imported.
EU spirits exports to India in 2004 amounted to just 23 million euros (£16m), while wine sales were just over four million euros.
The EU also wants a change to laws in the Indian state of Tamil Nadu, where only Indian-made spirits and wines can be sold.
EU Trade Commissioner Peter Mandelson has just returned from a visit to India, where he raised the issue during a meeting with his Indian counterpart, Kamal Nath.