Australian wine producers are increasingly looking towards the Indian market to sell their premium wines. This was largely because of the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) which made India market favourable and after China became less favourable due to the punitive tariffs introduced by China on Australian wines.

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The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) entered into force on December 29, 2022. Since the agreement, it has already seen a reduction in tariff on Australian wine bottles costing over $5 per bottle. The tariff was as high as 150%. In next eight years, the tariff will decline further.

John Southwell, Trade and Investment Commissioner (Agrifood) at Australian Trade and Investment Commission (Austrade) told CNBC-TV18, “As the tariff decreases with every passing year, more and more Australian wines, largely premium wines, will make their way to India.”

He added that in about a month’s time, premium Australian wines will see another round of phased tariff cuts – making Australian wines a great proposition for Indian wine importers.

He further stated at present many Australian wine producers are exploring and understanding the market. But that would not translate into a sudden flurry of Australian winemakers in India. Recently, at the ProWine event in Mumbai, Austrade facilitated the presence of 24 Australian wineries – the largest-ever Australian wine delegation to India.

Southwell said, “So, we don't expect a sudden spike in wine exports to India – rather a steady rise.” According to trade data, Australia exported wine worth $5.73 million to India in April-September 2023, and the number for 2022-23 stood at $10.37 million.

Most of the Australian wine exporters, Southwell believes, are looking at expanding into India alongside the domestic industry. “It’s not about competing but rather complementing the winemakers in India.” He believes Indian winegrowers will be able to embrace various technologies and processes Australian companies follow.

Other than wine, Southwell stated, cotton producers in Australia are also looking at increasing exports to India. As per the agreement, India allows import of approximately 2.30 lakh bales of Australia cotton duty-free. In 2022-2023, India imported cotton amounting to $281.93 million, whereas imported $ 527.38 million from the United States. “Like wine, Australian cotton growers are looking at tapping the premium segment.” Southwell added.