New Delhi According to a report released by Indian think-tank ICRIER on Thursday, only 2% of Australian wine imports will get reduced duty in the Indian market under the free trade agreement agreed by the two countries.
The higher price cap agreed under the interim agreement will benefit only wealthy Indian consumers, barring middle class buyers and the Indian hotel and tourism industry, the report said. This, it said, highlights the scope for further liberalization of tariffs and removal of non-tariff barriers in wines under the full India-Australia Comprehensive Agreement (CECA) due to be signed in December 2022.
India has agreed to reduce tariffs on Australian wines, under an interim agreement. The duty on liquor with a minimum import price of US$5 per bottle will be reduced from 150% to 100% after the deal comes into force and to 50% over a subsequent 10 years. The duty on bottles with a minimum import value of USD 15 will be reduced from 150% to 75% and subsequently to 25% over 10 years. The report, “Liberalization of Liquor Trade under the India-Australia CECA”, was released by Indian High Commissioner to Australia Manpreet Vohra and Australia’s Deputy High Commissioner to India, Sarah Storey. “After discussions with all stakeholders, we have found that the threshold level should be US$25 per case for 12 bottles of 9 liters or 750 ml FOB (free on board),” said Arpita Mukherjee, Professor, ICRIER, and co-author of the report. The author said.
He said that when the report was shared with policymakers on both sides, there was confusion as to how the limit was set in the interim agreement because it only covered 2% of imports – “so high-income consumers have There will be cheap liquor while middle-income consumers will pay 150% duty for middle-class products.”
India and Australia signed the Economic Cooperation and Trade Agreement (ECTA) on 2 April, giving India duty-free access to 95% of the tariff lines exported to Australia. The report said the deal could lead to an inverted duty structure for the liquor industry in India as the duty for bulk imports of alcohol has not been reduced, making finished goods cheaper than those bottled in India .