A consultation process that ended in December 2012 failed to reach a solution.

A senior commerce department official told Business Standard that the US was not satisfied with the consultations.

"Now, the case has started formally. We are very clear on our position. This is a matter which concerns public health and safety. We are going to retaliate very strongly," he said.

WTO norms state that after a complaint is filed, consultations are to be held between the two concerned parties. The case is dismissed should a settlement be reached. However, if consultations fail, both parties are asked to form a panel, after which the case is initiated.

A ban was imposed by India on chicken leg imports from countries having recorded cases of avian influenza. This decision was based on a notification issued by the Department of Animal Husbandry last year. According to the notification, poultry product imports would be banned from countries having bird flu cases, even those of the low pathogenic category. However, the notification was country-neutral and did not specify the US.

Till September 2011, the US had recorded low-pathogenic cases, Business Standard reports.

According to the US, the notification was unscientific, accusing India of violating sanitary and phytosanitary measures. The US accused India of imposing a non-tariff barrier on its imports.

The Indian poultry sector was anxious about the fact that cheaper poultry products from the US might affect business, as a price revision might be coerced, the US said.

Another trade misunderstanding between India and the US - concerning a solar programme - is yet to be taken up by the WTO's DSB. The consultation process for the dispute has just ended.

"Now, it is the US that has to decide whether it wants to seek a panel or is satisfied with our explanation," the official said.