India Australia Economic Co-operation Trade Agreement (ECTA) will scale and grow the wine industry and benefit grape farmers in the country, said Nita Kapoor, Chief Executive Officer, The International Spirits and Wines Association of India (ISWAI) on Wednesday.
ISWAI is a representative body of the national and international premium spirits and wine brands in India. India Australia Economic Cooperation and Trade Agreement was signed on April 2.
In an interview with ANI, Kapoor said, "Our Indian wine industry will get support in the area of harvesting, crop cultivation, good quality wines, best practices, tracking and tracing and consistency of quality."
This is the start of the India-Australia trade relationship. India has given the commitment to reduction for wines from Australia. The applicable duties for wines above USD 5/750 ML bottle will be reduced from 150 per cent to 100 per cent and after every year it will be reduced by 5 per cent for the next 10 years. Whereas, Australia has given complete tariff elimination for wines from India from the date of entry into force of this agreement.
"As India will rationalise the custom duty on wine, Investment from Australia will start coming. Australian wines are the best in the world. Australian wine companies can collaborate with Indian wineries in many areas. This is a first start in the right direction," she said.
On the question, whether the agreement would reduce the rates of Australian wines once it comes into force, the CEO said that the reduction in price is less likely.
"I don't think that duty reduction is going to make much price difference as the wines imported from Australia, Italy, United States of European Countries are priced over and above USD 5/750ML or more. This is not going to make the rate of imported wines cheaper. This will reduce the price but not that much which is talked about and discussed," she said.
"Duty has not been reduced drastically and both the minimum threshold price USD 5-15/750 ML bottle and USD 15/750 ML bottle are not going to make much difference price-wise. As far as a commercial advantage is concerned, this will take time," Kapoor added.
The CEO further said that there is a need to scale up the market of wine in India.
"Our members like Pernod Ricard, makers of Jacob Creek Wine, and Moet Hennessy are studying the agreement. Until we dont get a volume threshold through import that is commercially viable and investment-friendly we will try to engage both countries through knowledge and services. We need to scale up the market of wine in India. India is the only country in the world which has dominance in brown spirits," she said.
"Indians like whisky and beer more than wine. The wine market has started growing now. Today if we talk about the Alcohol beverage industry, wine has a market of only one per cent.As per the India-Australia ECTA, both countries will strengthen bilateral cooperation on the trade of wines including customs procedures, regulatory requirements, certification and testing procedures," Kapoor added.
This is the first trade agreement with a developed economy after more than a decade. This agreement will be signalling for other developed countries' agreements such as the UK, Canada and the EU, with whom India is currently negotiating for FTA.
( With inputs from ANI )
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