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Australian wines could dominate Indian landscape

Australia signed a historic trade agreement with India, the Australia-India Economic Cooperation and Trade Agreement, that will further strengthen the relationship, while making Australian exports to India cheaper and creating huge new opportunities for workers and businesses.

Australian wines could dominate Indian landscape
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Australian wines could dominate Indian landscape

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Australia signed a historic trade agreement with India, the Australia-India Economic Cooperation and Trade Agreement, that will further strengthen the relationship, while making Australian exports to India cheaper and creating huge new opportunities for workers and businesses.

Tariffs will be eliminated on more than 85 per cent of Australian goods exports to India (valued at more than $12.6 billion a year), rising to almost 91 per cent (valued at $13.4 billion) over 10 years.

Australian households and businesses will also benefit, with 96 percent of Indian goods imports entering Australia duty-free on entry into force. In the 2021 calendar year, Australia exported almost $12 million of wine to India, the highest figure ever, according to the latest data released by industry body Wine Australia.

Australia is the sixth-largest wine producer and the fourth largest wine exporter in the world. Volume also increased by 71 per cent to 2.5 million litres in India, and 74 per cent of this volume of wine was red wine

During this period, Australian exporters shipped wine to 112 destination markets, with the most significant growth coming from exports to South Asian and Asian countries. Tariffs on wine bottles with minimum import price of $15 will be reduced from 150 per cent to 75 per cent on entry into force and subsequently to 25 per cent over 10 years (based on Indian wholesale price index for wine).

Tariffs on wine with a minimum import price of $5 per bottle will be reduced from 150 per cent to 100 per cent on entry into force and subsequently to 50 per cent over 10 years (based on Indian wholesale price index for wine).

There's a good margin to be made and there's a good market there looking for premium products. There is a demand, especially in the middle and upper-middle class in India, as they are becoming more aware of the wine culture. So there is a big opportunity for Australian wines to penetrate this market,

Australian wines typically sold for between $20 and $40 had the most to gain. The Australian wine industry has seen about $1 billion in trade with China vanish since 2020 in an ongoing trade dispute.

India currently has a 150 per cent tariff for alcoholic beverages Australian wineries however have to contend with state taxes on wine imports, but there is hope that relationship building and technical industry co-operation will help parties build mutual agreements. However, wine experts say the Indian market is not an easy one to crack as import taxes on wine are high and the landscape is quite unique. For Australia, being able to provide India with some of Australia's fine wines at more affordable prices is something they have achieved.

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