In a dispute pertaining to preferential treatment to some countries, a World Trade Organisation dispute settlement panel has ruled in India's favour against the European Commission.

The panel, set up at India's request in January 2003, has upheld its contention that the European Commission has violated WTO obligations in granting tariff preferences to 12 countries under the 'drug arrangements' window of its generalised system of preferences without extending it to other developing nations.

It also ruled that the EC had failed to demonstrate that the drug arrangements were justified under the enabling clause, which otherwise allows the developed countries to grant tariff preferences to some developing countries without allowing the same advantage to others.

India would seek adoption of panel report at the earliest in accordance with the provisions of WTO Dispute Settlement Understanding, an official statement said in New Delhi on Tuesday.

This WTO ruling is likely to provide some relief to the Indian exporters to EC, particularly in the apparel sector, which otherwise faces disadvantage by duty concessions to Pakistan under 'drug arrangements'.