ICRIER: India should reduce tariffs on alcoholic beverages in high growth areas: ICRIER

NEW DELHI: Economic policy think-tank ICRIER has suggested that India should reduce custom duty on alcoholic beverages and offer phased tariff liberalisation in high growth areas like wine to gain market access for its exporters. Presently, among alcoholic beverages, tariffs are the highest for wine, with the price of imported wine ranging between 200 and 400 per cent of the global average price.
India cannot sign trade agreements with its key export markets without reducing tariffs for alcoholic beverages and must offer phased tariff liberalisation in growth areas like wine to gain market access for its exporters, said a report by Indian Council for Research on International Economic Relations (ICRIER).
“For more than two decades, countries such as Australia and the USA have expressed concerns about the high import duties, which act as a major disincentive for wine exporters from these countries/regions to India,” said an ICRIER report titled “Liberalisation of Wine Trade under the India-Australia CECA”.

The report focuses on the scope for liberalisation of tariffs in wines and the removal of non-tariff barriers under the India-Australia comprehensive agreement (CECA), due to be signed in December 2022.
“While Indian consumers want access to quality wines at cheaper rates, the threshold price of bottled wine that has been liberalised under the ECTA (Economic Cooperation and Trade Agreement)is over USD 5 and USD 15 CIF. Thus, the duty reduction benefits only the upper end of wine imports and high-income consumers,” it said.
The rest of the wine imported from Australia – about 98 per cent, which is consumed by middle-income consumers – continues to attract a duty of 150 per cent.
In FY20, India exported wine worth $7.2 million and imported wine worth $19.55 million.
According to the report, the ECTA does not cover bulk wine imports, which could fructify “Make in India” plans.
Reduction in the threshold level along with zero duty on bulk imports in the forthcoming India-Australia comprehensive agreement in December this year will enhance B2B collaboration, investment inflow and manufacturing in India.
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