Tariffs on premium Australian wine exports to India will be substantially reduced under the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) signed on 2 April 2022.

The AI-ECTA includes tariff reductions for a range of agricultural commodities. These include sheep meat, wool, wine, horticulture, fisheries, and forestry products. A summary of the key outcomes for Australian agriculture is available here.

The AI-ECTA is expected to enter into force in 2022, after both countries complete domestic and parliamentary processes.

Summary of tariff reductions under the AI-ECTA

Tariff reductions will reduce the taxes paid on imports of Australian wine to India. The reductions will improve the competitiveness of Australian wine relative to imports from Chile, France and Italy. This paves the way for Indian consumers to enjoy a greater variety of Australian wine at more attractive prices.

Wine consumption trends in India

Wine exports to India have significant growth potential.

India has the world’s third largest alcoholic beverage sector, valued at more than US$35 billion (Source: USDA 2022). Wine is not a traditional drink of choice for most Indian consumers. However, wine consumption has grown steadily over the last two decades. Wine consumption is projected to grow by 8% per annum to 2024 (Source: Euromonitor 2021).

Increased wine consumption in India reflects a change in demographics and attitudes to alcohol due to its lower alcohol content.

India’s young and increasingly wealthy population is driving increased demand for refined, premium imported products. Simultaneously, sensitivities around alcohol consumption are easing (particularly by women). Wine consumption is becoming a symbol of wealth and status.

In 2021, Australia was India’s largest source of wine imports. Australia has a 43% share of the Indian market valued at a record A$12 million. Exports are also off to a record start in 2022 (Source: ABS 2022).

Reduced tariffs and established trade links mean Australia is well placed to meet India’s growing demand for premium wine.

Source: Austrade

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