India-Australia trade pact: India rejects demand for tariff cuts on dairy and wine; second phase of BTA delayed

India has rejected Australia’s demand for deeper tariff concessions on dairy and alcoholic drinks, delaying the second phase of a proposed bilateral trade pact, information company Reuters reported citing two Indian authorities sources.The international locations signed an interim deal in 2022 that decreased tariffs on a variety of items. However, talks on a full-scale Comprehensive Economic Cooperation Agreement (CECA) protecting items, companies and visas have stalled, with dairy and wine rising as key sticking factors, the sources mentioned.“There is no question of agreeing to Australia’s demands for further tariff cuts on dairy and wine,” mentioned a senior Indian official instantly concerned within the negotiations. The official, talking on situation of anonymity, cited considerations over potential impacts on hundreds of thousands of Indian farmers, the home wine business, and grape growers.Australia has been urgent India to cut back duties extra aggressively. Under the present interim deal, tariffs on Australian wine priced above $5 per 750ml bottle have been decreased from 150% to 100%, with a gradual goal of 50% over ten years. For wine priced above $15, tariffs have been reduce to 75%, with a goal of 25% over the identical interval. Australia now seeks to decrease the worth thresholds at which cuts apply and speed up the reductions.“We’d like to see a reduction in the price at which tariff reductions kick in and a speeding up of those reductions,” mentioned Lee McLean, CEO of business group Australian Grape & Wine. He famous that prime taxes imply even comparatively reasonably priced Australian wines, priced at A$10–15 at dwelling, can retail for over A$100 ($65.77) in India.India’s resistance stems partly from rising opposition by farmer teams and politicians in Gujarat — Prime Minister Narendra Modi’s dwelling state — and Maharashtra, a serious grape-producing area. The Rs 2.9 lakh crore ($35 billion) alcoholic drinks business has additionally opposed making additional concessions.On dairy, Australia has sought higher entry for merchandise resembling cheese, high-protein whey focus, lactose and processed items, which presently face Indian tariffs between 20% and 30%. But India’s massive and politically delicate dairy sector stays a barrier.“Current tariffs are prohibitive,” mentioned Karl Ellis of Dairy Australia. He added that whereas mainstream dairy exports to India are unlikely, area of interest objects like high-protein whey and choose cheeses might assist Australia faucet into the $30–40 million Indian market, which is now largely served by European suppliers.Despite the stalemate, officers mentioned each side are nonetheless dedicated to advancing the pact. India is open to decreasing tariffs on industrial and non-agricultural items, whereas pushing for better entry to Australia’s companies market and visa quotas, a second Indian official mentioned.Australia’s Department of Foreign Affairs mentioned negotiations stay backed by each prime ministers and {that a} accomplished CECA would improve bilateral trade and construct a extra resilient financial partnership.