Will European wine finally get cheaper in India? Inside the EU–India trade deal

The EU-India trade agreement promises lower import duties on European wines — but state taxes, excise laws and currency volatility complicate the picture. Importers explain what will truly change for India’s wine market

Are you already dreaming of bountiful champagne soirées and affordable Bordeaux Grand Crus? Hold the thought, because it might take a little longer for these dreams to become reality, though ultimately, the consumer will be left smiling.

The EU-India trade agreement announced on India’s Republic Day this year, has generated much excitement. This ‘mother of all deals’ encompasses multiple industries, and among them, wine. For the beleaguered European wine industry, the announcement has come at a time of stagnant growth, compounded by the high tariffs imposed by the US. As a result, Indian importers and journalists have been inundated with requests for information and assistance to start the process of bringing European wine into India. The mood is upbeat. 

The initial announcement stated that the 150% central import duty would be reduced over time to 20% for wines in the premium range, to 30% to midrange wines | Photo Credit: petrenkod

The initial announcement stated that the 150% central import duty would be reduced over time to 20% for wines in the premium range, to 30% for midrange wines. But is this all? While India is the world’s fourth largest economy with a population of 1.45 billion people with an annual GDP of €3.4 trillion, alcohol is taxed primarily by individual State governments. 

Top markets for alcoholic beverages include Maharashtra (Mumbai), Karnataka (Bengaluru), and Delhi, among others, but several states are completely dry (no alcohol), while others levy varying taxes and cesses. Excise duty, the primary tax levied by the states, is built into consumer retail prices. Variable State-imposed VAT further impacts prices. There is no one size fit all scenario as far as sales of wine (or any alcoholic beverages) in India is concerned, making the Indian wine market complex to understand.  

Top markets for alcoholic beverages include Maharashtra (Mumbai), Karnataka (Bengaluru), and Delhi, among others. | Photo Credit: fcafotodigital