With grapes left on the vine this vintage for want of tank space following the loss of China’s wine market, the industry cheered then news on 2 April 2022, of an interim Comprehensive Economic Cooperation Agreement (CECA) between Australia and India being signed by the two countries’ trade ministers. The possibility of such an agreement has been talked about since 2011 but negotiations lapsed in 2015, before re-opening in June 2020. Many still had low expectations of an agreement being reached promptly, and few expected wine import tariffs to be among those lowered most.
India has a whopping 150% tariff on all wine imports, but has agreed to reduce that on Australian bottled wine from the outset of this agreement coming into force. The tariff will be immediately lowered to 100% for bottles in the US$5 to $15 range and to 75% for bottles above US$15, and then lowered further, by 5 percentage points, every year for a decade. Since Australia’s wine exports to India are almost all are in the bottled commercial premium range, it means by the early 2030s those entering India’s market will face a tariff of just 50%, and of just 25% for super-premium wines. Moreover, India has committed to extend to Australia any market access improvements it may offer other countries in future bilateral, regional of multilateral trade agreements.
To see how that might boost Australia’s wine exports and offset the loss of the China market, this article first provides a summary of the Indian market and then uses our model of global beverage markets to assess the wine trade impacts of CECA.