The Australia-India Economic Cooperation and Trade Agreement is a landmark agreement providing Australian producers with a first-mover advantage in one of the world’s fastest growing economies.
Australia’s reputation for premium food and beverage products is thriving in India. The nation’s growing middle class has a taste for everything Australian, from our lean lamb to our tasty toothfish, and even our world-class wines.
The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) provides access to a large segment of India’s 1.4 billion population. The agreement reduces tariffs on nearly 90 per cent of our current food and agricultural exports. This includes sheep meat, wool, horticulture, seafood, fruit, infant formula, and wine. Exporters also gain preferential tariff quotas for lentils, citrus, almonds, cotton, and pears.
India’s grocery and food retail market is forecast to rise to US$850 billion by 2025.
Food consumption is trending toward premium seafood, fruit, vegetables, and dairy products, while confectionary, beverage and snack consumption continues to grow rapidly.
Here are four areas where AI-ECTA will support food and beverage exporters.
Sheep meat
AI-ECTA has eliminated the 30 per cent tariff on sheep meat exports, securing Australia’s place as a key supplier servicing 5-star catering and opening high-end retail opportunities.
Premium lamb exporter, Mulwarra, is one company benefiting from the tariff reduction. AI-ECTA has made their lamb cheaper to import and more competitive in the market, encouraging Mulwarra to increase exports for 5-star restaurants, and develop plans to diversify into high-end retailers.
Nuts
Tariffs on macadamias, cashews in-shell, shelled pistachios and hazelnuts will be eliminated over six years, while almonds will see an immediate 50 per cent tariff reduction on in-quota exports.
Almonds are the most valuable commodity Australia exports to India. Producers including Select Harvest and Nut Producers Australia are tapping into this demand, positioning India as a key market in which to grow and diversify exports.
Seafood
Australian seafood producers have more opportunity to feed India’s growing demand with the immediate elimination of tariffs for fresh rock lobster and tariff reductions over six years for other fresh, frozen and processed seafood products, including frozen rock lobster, Atlantic salmon and tuna.
AI-ECTA has given Australian Longline’s Patagonian toothfish exports a boost. The reductions in tariffs will see Longline exports more competitive in market and set them up to diversify across the premium fish market.
Fruit and vegetables
Oranges, mandarins and pears, have seen an immediate 50 per cent tariff reduction for in-quota exports. Avocados, onions, cherries and berries will see the elimination of tariffs over six years.
AI-ECTA has encouraged citrus exporter, Nutrano, to shift focus to India. With a cheaper end price, Nutrano plans to grow its market by moving bigger shipments and developing a new distribution strategy to target a larger market.
Wine
Already the leader in the imported market with a 44 per cent share, AI-ECTA cements Australia’s position ahead of key competitors, Italy, France, and Chile.
Under the agreement, Australian wine priced at US$15 per bottle or more has had the 150 per cent tariff reduced to 75 per cent. This will reduce annually over 10 years with a final tariff rate of 25 per cent. Tariffs on wine priced between US$5-15 have fallen to 100 per cent and will decrease to 50 per cent after 10 years.
South Australia’s Torbreck Vintners is one exporter benefiting. Tariff reductions will reduce the end price of its premium Barossa wines by eight per cent making Torbreck more accessible to Indian consumers.
Another benefit for wine is the most favoured nation clause. This future-proofs exporters by ensuring any preferential tariff treatment afforded to other countries in free trade negotiations will automatically be applied to Australian wine.
As Austrade’s trade and investment commissioner in India responsible for food, beverage, and agribusiness, me and my team work to further the interests of Australian food and beverage exporters in the Indian market, take advantage of the opportunities that AI-ECTA presents, and foster connections needed to launch and grow in the market.
