Indian winemakers are keen to bring the expertise of Australian wineries to India, as the two countries are finalising the list of items under Free Trade Agreement (FTA) negotiations.
Jagdish Holkar, president, All India Wineries Association (AIWPA), who was part of the delegation that met Union commerce minister Piyush Goyal and Australian trade minister Dan Tehan recently, said taxes should not be the only focus. Importance should also be given to the entire value chain, including wine tourism. “We would like Australians to visit Indian wineries and vice versa and would also like them to join hands with Indian local players for expertise, technical know-how and investments,” he said.
One of the top priorities for Australia in the ongoing India-Australia Comprehensive Economic Cooperation Agreement negotiations is to convince India to substantially lower the 150% import tariffs on wines and spirits. The Indian wine industry has suggested that the tariffs could be brought down to 100%, and to 50% over the next 10 years, subject to a minimum assessable value (MAV) of $5 per litre on bulk imports of wine and $3.75 per bottle.
Australia has around 4,500 wineries, many of which are family owned, and the Indian wine sector could benefit from them, he said. Australia is the sixth largest wine producer and the fourth largest wine exporter in the world. The Indian market is nascent and currently has a market of 3.5 million cases, including 500,000 imported cases. More than 50% of the imports are from Australia, the biggest brand among which is Jacob’s Creek, Holkar said.
Vinod Giri, director general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), echoed the sentiments. CIABC has cautioned that adequate care should be taken to ensure that third country products are not able to take advantage of the pact with Australia. “To qualify for concessions under the FTA, the regional value content of the product should be at least 70%, i.e., at least 70% of its value must have been created within the country it is being imported from,” the industry body has said in letter to the commerce ministry.
“The Indian industry is not averse to the idea of including wines and spirits in the FTA, but they have certain apprehensions that need to be taken care of,” the letter said. Moreover, India should insist on Australia removing non-tariff barriers on Indian exports, such as not accepting whiskies made from spirit distilled from molasses, which is a common practice in a sugar-rich country like India, CIABC said. Australia should also stop insisting on a three-year maturity for whisky as in the warm Indian climate, whisky matures three times faster and in three years’ time loses around 30% volume due to evaporation, it said.
The commerce ministry has called for another round of talks with the wine industry.
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