Indian winemakers will remain largely unaffected by India–EU free trade deal

Subscribe to enjoy similar stories. Indian winemakers are likely to remain unaffected by lower tariffs on premium European wines under the India–EU free trade agreement, as the duty cuts will largely bypass the price segment in which domestic producers operate, experts said. At present, imported wines are subject to a steep 150% import duty in India.

Under the new pact, this duty will be reduced to 75% and eventually slashed to as low as 20% for premium wines and 30% for mid-range wines, according to an official release by the European Commission. Meanwhile, wines priced below €2.5 will not receive any duty concessions, PTI reported. Industry executives said the structure of the tariff cuts, combined with the small size of India’s wine market, would limit competitive pressure on domestic producers.

“If that is correct, then the domestic wine industry will not be affected at all because more than 80% of domestic wines will be below that cut-off," said an industry executive. Karan Kamdar, research analyst at brokerage firm Choice Institutional Equities, said, “The impact of the FTA is likely minimal on Indian alcobev companies. Wines may be the most impacted by EU imports, but wine accounts for only 2% of India’s alcohol consumption by value.

It is a premium category and there is not enough education yet for mass consumers to move to wine consumption. As a result, imported wines are a faster-growing category than local ones." India’s wine market still accounts a tiny fraction of overall alcohol consumption, and price cuts alone are unlikely to trigger a sharp rise in imports. Wine accounts for less than 1% of total alcohol volumes in India, while complex state taxes, registration fees and distribution hurdles continue to