Indian whiskey makers look forward to reciprocal market access in Australia

The issue with alcohol relates to maturation regulations, where Australian customs laws only allow whiskey and spirits that have been matured for at least two years. However, the Indian side has been pressing for the removal of this condition, arguing that Indian whiskey matures faster due to the hot climate and that two years of maturation results in a 10% loss due to evaporation.

The Indian alcoholic beverages lobby has urged the government to ensure that the Joint Working Group agrees on a formula to arrive at a mutually acceptable position, along with timelines and milestones relating to access to Indian whiskey and other spirits . The two sides are discussing the composition of the Joint Working Group and whether it will have industry representatives apart from government officials.

“Discussions are going on regarding the setting up of the working group. We have until June to set this up and we are consulting with our industry to ensure the best possible outcome.

According to the side papers of ECTA signed by the trade ministers of India and Australia, market access for Indian wine will be examined by a working group, which will meet within six months of the entry into force of the agreement.

According to the side letter, “the parties will consider issues relating to market access, including maturation rules for whiskey and other alcoholic beverages … The two sides will regularly review progress of the Working Group through the Subcommittee on Trade in Goods.” The Ministry of Commerce and Industry and the Australian High Commission remained unanswered till press time on Wednesday. “We are aware that both governments are looking into the matter with working groups. We expect the WG to be rolled out immediately so that the details thereafter can be worked out,” said Vinod Giri, director general of the Confederation of Indian Alcoholic Beverages Companies (CIABC). The stream and associated timelines can be worked out and the team can work out a solution.”

He added that the CIABC has already presented what its members feel should be the remit and broad scope of the matters to be taken up by the working group. “India is primarily a distilled spirit or liquor producer. Therefore, a large amount of benefit from the Australia FTA for India is locked in Australian non-tariff conditions, such as minimum maturation for whisky,” he said. India is booming as a producer of high-quality single malt whiskeys such as Amrit, Rampur and craft gins like Jaisalmer, Terai and Stranger & Sons.

For the first time, India provided duty concessions for liquor under the trade agreement. India has allowed a minimum import price on wine from Australia to be reduced from 150% to 100% upon implementation of the deal and subsequently by 50% over 10 years with a minimum import price of $5 per bottle. Tariffs on bottles with a minimum import price of $15 were reduced from 150% to 75% upon deal implementation, and subsequently to 25% over 10 years.

ICRIER Professor Arpita Mukherjee said food and beverage exports have country-specific standards, apart from tariffs, that have to be met. These can be non-tariff barriers. Countries can work together for mutual recognition of standards under trade agreements.

The India-Australia Economic Cooperation and Trade Agreement (ECTA) came into effect on December 29, 2022 and is to be signed in April, 2022. one (accounting for 96.4% of India’s exports to Australia in value terms) and the remaining 1.7% in a phased manner over five years.

India extends immediate tariff elimination on 40% of its tariff lines representing 85% of Australia’s exports in value and will eliminate or reduce tariffs on another 30.3% of its tariff lines over time of 3,5,7 and 10 years . period.