Wine has become a key sticking point in ongoing trade negotiations between Australia and India. The two nations signed an interim trade pact in 2022, but India has now rejected Australia’s push for deeper tariff cuts on dairy and alcohol as they work towards agreeing a Comprehensive Economic Cooperation Agreement.
Debate over the two industries risks hampering efforts to conclude the second phase of the trade pact by the end of 2025.
Under the interim pact, tariffs on Australian wine priced above AU$5 (HK$25.21) per 750ml bottle were cut to 100% from 150%, with a provision of a reduction to 50% over 10 years. For bottles above AU$15, tariffs dropped to 75%, with a target of 25% in a decade.
Australian officials would like to see deeper and faster tariff reductions, as well as a reduction in the minimum price at which those tariff cuts can apply.
Further reductions would give a greater number of Australian wine producers better access to the market.
Pushback comes from Indian officials, who fear that an influx of Australian wine would damage the country’s nascent domestic industry. Indian government sources told Reuters in July that farmer groups and politicians from Gujarat and grape-growing Maharashtra, along with the US$35 billion (HK$272bn) alcoholic beverages industry, are strongly opposing any concessions.
Lee McLean, CEO of trade body Australian Grape and Wine, argued that tariffs make India a less attractive market for producers and put off Indian consumers.
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