New Delhi, June 2 (Agency) India must offer phased tariff liberalisation for wine imports while negotiating free trade pacts with countries to gain market access for its exporters, New Delhi-based think tank Indian Council for Research on International Economic Relations (ICRIER) said on Thursday. Releasing a report titled “Liberalisation of Wine Trade under India-Australia CECA’ the policy advisory said that India cannot sign trade agreements with its key export markets without reducing tariffs for alcoholic beverages. The report focuses on the scope for liberalisation of tariffs in wines and removal of non-tariff barriers under the India-Australia comprehensive agreement (CECA), due to be signed in December 2022.
“While Indian consumers want access to quality wines at cheaper rates, the threshold price of bottled wine that has been liberalized under the ECTA (Economic Cooperation and Trade Agreement) is over US$5 and US$15 CIF. Thus, the duty reduction benefits only the upper end of wine imports and high-income consumers. The rest of wine imported from Australia – about 98%, which is consumed by middle income consumers – continues to attract a duty of 150%,” the report said. The report proposed a maximum threshold of USD25 per case of 9 litres/12 bottles of 750 mil /(FOB), which benefits the wine industry in both countries, reduce prices for middle-class consumers and enable the Indian hotel and tourism industry to grow. As per the report, among alcoholic beverages, tariffs are the highest for wine with the price of imported wine ranging at between 200 and 400% of the global average price. “For more than two decades, countries such as Australia and the USA have expressed concerns about the high import duties, which act as a major disincentive for wine exporters from these countries/regions to India,” ICRIER said. Speaking on the report launch, Manpreet Vohra, High Commissioner, High Commission of India, Canberra, Australia said, “We have reached a landmark agreement on 2nd April. This is India’s first FTA with any developed country in decades.
It is the first time that India has agreed to a reduction of tariffs on wine. This demonstrates the fresh thinking of new India today. I compliment the negotiators on both sides for being flexible and responsive and ensuring the provisions are win-win for both sides.” “Australian wines are enjoying a predominant position in India even before ECTA and I have no doubt this will be further bolstered with the agreement. Wine consumption in India is only about 1 percent of the total market for alcoholic beverages but growing very rapidly among the urban middle class and the youth,” Vohra further said at the virtual event. Given that India for the first time liberalised the alcoholic beverages sector in its interim agreement with Australia, the report is expected to provide the roadmap for the country’s negotiations with trade partners like the EU and the UK. “The report will help policymakers negotiate trade agreements, sector experts to provide inputs into trade negotiations and scholars to understand the nuances and complexities of negotiating a trade agreement,” the think tank said.