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

At present, imported wines are subject to a steep 150% import duty in India. Under the 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, cheaper wines priced below €2.5 will not receive any duty concessions, as reported by PTI.

Industry executives said the structure of the tariff cuts, together 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 the domestic wines will be below that cut-off," said an industry executive.

“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," said Karan Kamdar, research analyst at brokerage firm Choice Institutional Equities.

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 constrain foreign labels.

As a result, any duty relief is expected to benefit only a narrow band of premium imports rather than reshape the broader market. “Anybody buying an imported wine costing ₹1,500, a ₹100 drop is not going to make much of a difference," the executive said.

Spirits to bear the brunt

By contrast, the impact of the trade agreement is expected to be more visible in spirits, where volumes are larger and consumer familiarity is higher. “Where you may see some differences is in the spirits portfolios, where the duties are supposed to come down to 40%," said Vinod Giri, director general of the Brewers Association of India (BAI), referring to European spirits under the pact. He added that mass-market international brands stand to gain more from the duty cuts, as products such as vodkas already enjoy wider acceptance among Indian consumers.

Shares of listed Indian wine makers, however, fell on Monday amid near-term investor caution. Sula Vineyards closed 3.1% lower at ₹188 on the NSE, while Fratelli Vineyards slipped 4.6% to ₹87.4 on the BSE.

Sula Vineyards’ chief executive officer Rajeev Samant told Mint that while red wine has traditionally led the market, rising temperatures and changing preferences are pushing the company to expand its portfolio of cooler varietals such as rosé, tap new cities through urban wine festivals and scale back imports amid rising competition.

EU imports into India fell to ₹77.23 crore in FY 25 from ₹3442.98 crore in FY24.

Beer battle

The broader alcohol sector is also bracing for sharper competition in beer following tariff reductions on imported European beer from 110% to 50%. This will narrow the price gap between international labels and domestic premium brands, intensifying competition on value, said Vedant Kedia, whole-time director at Mount Everest Breweries Ltd, which owns brands such as STOK and Mount 6000.

“While brewing inputs like hops and grains are relatively stable, packaging—specifically aluminium cans and glass bottles—remains a significant and volatile expense that is sensitive to trade shifts," Kedia said.

However, lower duties are expected to support growth in the mass-premium segment. “Our premium brand, STOK, has grown by 75% in the last year, proving that Indian consumers are already eager to trade up for better quality," Kedia said, adding that the company plans to capture a larger share of this segment by offering accessible price points.

The evolving trade environment could also allow firms to diversify portfolios more aggressively. “These shifts have made it practical for us to explore high-quality ingredients, new brewing styles and unique collaborations that were once considered too niche," Kedia added.