Australian avocados find a 'smashing new market' in India

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Australian avocados find a 'smashing new market' in India

Australian avocado growers are diversifying exports to India, thanks to new import conditions agreed upon by the Indian and Australian Governments. It’s also thanks to reduced tariffs in the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), an Australian government release informed.

Improved market access and a surge in demand mean Australian suppliers can sell premium avocados through multiple channels.

"Avocados are suddenly hugely popular in India," said Antony Allen, Chief Executive Officer, The Avolution (Avolution). "The Australian Government has responded very fast – with all sections of Government working as a team."

Smashed avo craze hits India

The AI-ECTA has made preferential access to food and agriculture possible, giving Australian growers a competitive advantage.

One company to seize the opportunity given by AI-ECTA and technical access for avocados is Queensland-based, Avolution. The horticulture marketing company is already a leading exporter of Hass avocados. It ships over 150 containers of avocados per year to Hong Kong, Malaysia, Singapore, and the Gulf region. 

However, demand for avocados is rocketing in India, according to Allen. This makes India a natural market for expansion.

"At the moment, consumers in India see avocados as a bit luxurious and exotic," he said. "But there is potential for huge volumes. India has an amazing variety of cuisines. Most are predominantly vegetarian. Avocados are an easy, healthy addition."

"Until now, price was a barrier," he added. "Premium avocados have been extremely expensive – up to ₹400 (400 rupees) per avocado. That’s where Australia comes in."

AI-ECTA gives Australian growers an advantage

The AI-ECTA entered into force at the end of 2022. It instantly reduced import tariffs on avocados to 25%. This compares to the 30% rate that applies to imports from almost all other countries. 

This import tariff continues to fall. The AI-ECTA includes annual reductions of around 4 ppts per year. By 2024, the rate had fallen to 17.1%. By 2028, the tariff rate will be zero. 

"Lower tariffs give us a huge competitive advantage over other importers – including growers in New Zealand, Peru, and Chile," says Allen. "In effect, it puts Australia’s exports on the same commercial footing as low-cost producers in Africa."

The tariff reduction also applies to fruits like apricots and kiwifruit, as well as macadamias. Blueberries and cherries also gain a preferential tariff rate, while citrus and pears are subject to a different reduction under a quota system.

Rapid market access

For avocados, however, there was another big challenge: technical market access. Allen reports this can often take years in his industry. 

In this case, Australia did not yet have technical market access for avocados, which requires direct negotiations between Australia’s Department of Agriculture Fisheries and Forestry (DAFF) and India’s Department of Agriculture and Farmers Welfare.

Thanks to work by DAFF in negotiating the protocol, trial shipments became possible in 2023.

Austrade officials in India helped in multiple ways, from market research to trade show attendance. They also helped identify possible importer-distributors. Austrade provided business connections to support the first trial shipments of avocados. DAFF’s agriculture counselor was on hand to ensure the trial consignments traversed customs and quarantine in good time.

"The trial shipments were a big challenge for us," he adds. "Austrade officials helped all the way. You can’t run a technical trial without customers. Austrade helped us find the right partner, so we had customers for our first consignment."

Cold supply chains improve in India

One factor that helps is logistics. Supply chains in India are steadily improving, according to Austrade’s Business Development Director, Bhavin Kadakia. That creates new opportunities for Australian growers.

"Avolution comes through a fully airconditioned supply chain," Kadakia said.

Reliable cold supply chains mean exporters can supply the fast-expanding HORECA sector. But it also means exporters can distribute through traditional channels – including the wholesale markets known as mandis or Agriculture Produce Market Committees (APMCs). These are state-run markets that operate nationwide and supply local vendors.

A ‘massive’ price advantage

The net effect of a trade agreement and rapid market access is a premium Australian product that’s competitively priced in India.

"We are looking at price reductions of around two-thirds," says Allen. "This means we can massively increase the breadth of our consumer market."

Allen says prospects for market growth are 'excellent'. He observes that social media has ‘changed the dial’ on his company’s ability to engage with potential customers.

"In India, our growth phase coincides with a period when it’s far easier to grow through social media," he explained. "India could easily overtake Hong Kong as our biggest export market within 2 to 3 years."

"What’s more, we can sell into multiple sectors. Our markets span the HORECA sector to tech-driven delivery services. Most astonishing of all, we now have premium Australian avocados on traditional roadside stalls in India. The market potential is huge."

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