The World Trade Organisation ruled Tuesday against India in a complaint brought by the United States concerning restrictions imposed over bird flu fears that halted poultry imports.
India halted imports of US chickens and eggs in 2007 over fears they could transmit bird flu, but the United States considered the restrictions excessive as it had not been hit by the H5N1 bird flu since 2004.
After bilateral talks failed, the United States took the matter to the WTO, which is the global arbitrator of trade disputes.
The WTO panel that considered the case found India's bird flu measures to be inconsistent with several agreements that allow countries to restrict trade to protect human, animal or plant health, concluding that they were "not based on a risk assessment".
The WTO experts also found the Indian measures "arbitrarily and unjustifiably discriminate between (WTO) members where identical or similar conditions prevail and are applied in a manner which constitutes a disguised restriction on international trade".
Washington welcomed the WTO ruling.
"This is a major victory for American farmers," United States Trade Representative Michael Froman said in a statement.
"The WTO panel agreed with the US case that India lacks any scientific basis to restrict US agricultural products, including US poultry products."
The US poultry industry estimates that exports to India of just poultry meat alone could easily exceed $300 million (230 million euros) a year once India’s restrictions are removed.
India may still appeal the ruling.