Why most Australian wine in India still pays the full 150 per cent duty

Nearly four years into Australia’s trade agreement with India, most Australian wine in India pays the same 150 per cent duty it paid before the deal. The tariff cut begins at a landed value of US$5 a bottle, and in 2025, 92 per cent of the Australian wine shipped to India, by volume, was priced below it.

Europe has since negotiated a schedule that starts further down the price list. Its trade agreement with India, concluded on 27 January 2026, will cut duty on wine landed at €2.50 or more, and a side letter to Australia’s agreement may let Australian producers claim any better terms.

A cliff at five US dollars

India’s wine commitments sit in an appendix to its tariff schedule under ECTA, the Australia-India agreement in force since 29 December 2022. It sorts wine by CIF value, the import price including cost, insurance and freight, for a 750 ml bottle. Below US$5, duty stays at 150 per cent. From US$5 to under US$15, it fell to 100 per cent on entry into force, and the schedule lowers it five points a year to 50 per cent in Year 10. At US$15 or more, it started at 75 per cent and falls the same way to 25.

The schedule’s notes put each annual cut on 1 January, and India gives effect to each one in a customs notification. The cut on 1 January 2024 was a double step, taking the middle band from 95 per cent to 85. The notification in force since 1 January 2026 sets 75 per cent for the middle band and 50 for the top, the schedule’s Year 5 rates. This year a bottle landed at US$4.90 pays 150 per cent, and one landed at US$5 pays 75.

Where Australian wine in India sits on the price list

India drank 3.2 million nine-litre cases of wine worth US$406 million in 2024, just 0.4 per cent of its alcohol market, according to a 1 April 2026 bulletin from Wine Australia, the sector’s Commonwealth statutory authority. Australia is its largest source of imported wine.

Wine Australia estimates that a landed price of US$5 a bottle generally translates to A$8 to A$10 a litre free on board, the price as the wine leaves Australia, depending on exchange rates and shipping costs. The 92 per cent that misses out is wine below A$7.50 a litre. At A$10 a litre or more, exports reached A$3.8 million in the year to December 2025, up from A$0.6 million the year before, and wine above A$7.50 rose from 3 per cent of the volume in 2022 to 8 per cent in 2025.

Europe’s schedule starts at €2.50

The European schedule also uses CIF value per 750 ml, in euros. Wine landed under €2.50 gets no concession. Between €2.50 and €10, the duty opens at 75 per cent in the first year and falls in annual steps to 30 per cent from Year 8; at €10 or more it falls from 75 to 20 per cent. Australian Grape & Wine, the national association of winegrape and wine producers, converts €2.50 and €10 to about US$3 and US$11.85, and says the outcomes “appear to be more favourable” than ECTA’s.

The final rates are 30 per cent in Europe’s middle band against 50 in Australia’s, and 20 against 25 at the top, though the bands are drawn at different prices. Before then, the comparison depends on when the European clock starts. Once the deal is in force, a European bottle landed between €2.50 and US$5 will get a cut that ECTA’s own schedule does not give an Australian bottle at the same price.

On 11 September 2026 the European Commission sent the agreement to the Council of the EU for signature. It then needs the European Parliament’s consent, while Indian authorities go through their own ratification procedures. The Commission has given no date for signing or entry into force, and says the published texts become final only on signature.

The promise in a side letter

Australia’s claim rests on a side letter that forms part of ECTA. In it, India affirms that Australian wine will receive “treatment as favourable as that provided to imports of like goods from any non-party”, covering duties and charges, the way they are levied and the “minimum CIF value of import”. DFAT’s summary says India will extend to Australia any market access improvements it gives future trade partners.

Australian Grape & Wine says this entitles Australia to equivalent treatment if India grants another partner improved tariff outcomes, and Wine Australia says that if EU wine ends up with lower rates, Australian wine will likely be given them too. The letter does not say how a band set in euros would be matched with one set in US dollars.

A rulebook for every state

Labelling, distribution, sales and tax rules for alcohol vary across India’s 28 states, Wine Australia says. Australian Grape & Wine singles out “divergent state regulation for wine” among the barriers it calls a major challenge, and says the Indian Government’s work with the states on harmonising wine rules is at an early stage. It calls reducing that burden a major focus of the Joint Dialogue on Wine, which a 2022 side letter set up to meet annually, with government and industry from both countries. The dialogue’s third meeting was held in New Delhi in the week the European deal was announced there.

Australian Grape & Wine began its India strategy in 2021. Five years on, it says India still “requires a long-term investment and a lot of patience”.

On 1 January 2027 the schedule steps the Australian rates down again, to 70 and 45 per cent. For the bottles that make up most of the trade, the number is still 150. Europe’s schedule reaches below US$5, on paper. Its first year has not begun.