India’s alcobev sector has mixed views about the sharp import tariff cuts on European spirits, wine and beer as part of the free trade agreement (FTA) between India and the European Union (EU), saying the move will offer significant strategic benefits to both markets in terms of expertise, but poses competition to domestic produce as foreign spirits get cheaper.
Under the deal, tariffs on wine — currently 150% — will be cut to 20% for premium wines (priced above 10 euros per bottle) and 30% for mid-range wines (priced between 2.50 and 10 euros). However, for wines below 2.5 euros, there will be no duty concessions.
Duties on spirits such as whisky, vodka and rum, also up to 150% under current rates, will fall to 40%, while beer tariffs will be reduced from 110% to 50%.
The duty concessions to wines from the EU are in line with what India has agreed for Australia (2022) and New Zealand (2025), but with slightly lower thresholds.
Duty reductions on alcoholic beverages, especially wines, were a key demand for the EU during the negotiations. The tariff cuts will be implemented in a calibrated manner over a period of seven years, said reports.
This means that wines imported from countries such as France, Italy and Spain will face lower taxes in India, making them more affordable and widely available for consumers.
What do domestic players say?
However, domestic players that FE spoke with were not enthused with the move as they saw it being detrimental to their growth in the local market in face of competition from foreign brands which will now be much cheaper. However, Indian wines will also benefit from the FTA as they will receive import duty concessions in the European Union (EU) member countries. What these concessions are, is unclear at the moment.
“The move to slash import duties on European wines will certainly flood the market with these brands. I have received a lot of enquiries from European wine makers who are keen to get into the Indian market. I hope to study the notification closely to understand its implications,” said Bharat Deshmukh, a wine expert and industry veteran.
The Rs 10,000-crore domestic wine market, which is growing at 12-15% per annum, is largely dominated (80-85%) by local players such as Sula Wines, Fratelli and Grover Wines, according to industry experts. The balance 10-15% constitutes smaller players. Imported wines have a negligible share at the moment.
Price difference
At the current duty structure, a 750-ml entry-level bottle of Indian wine is priced at Rs 900, while an imported bottle of wine of the same quantity is priced at around Rs 2,000. Mid to premium Indian wines are priced at Rs 1,200-1,500 for a 750-ml bottle, while imported wines can range from Rs 2,500-Rs 6,000 for 750-ml bottles. Luxury wines can go up to Rs 30,000 for a 750-ml bottle.
In the alcoholic beverages segment, India’s exports to the EU include wines ($1.4 million in 2024-25), blended whiskeys, vodka, brandy, and liqueurs ($24.5 million). The imports are wines ($7.9 million), blended whiskeys, brandy, gin, tequila, vodka, and liqueurs ($87.8 million).
Meanwhile, commenting on the tariff reduction and mutually beneficial trade, Sanjit Padhi, CEO of the International Spirits & Wines Association of Indian (ISWAI), said the agreement is clearly a welcome development for consumers. “India’s increasingly aspirational and discerning consumers will gain improved access to premium international brands at more accessible price points.
This broader choice is expected to enhance the overall consumer experience, accelerate premiumisation within the alcobev sector, support growth in allied sectors such as tourism and hospitality, and contribute positively to state revenues.”
ISWAI members include global leaders like Bacardi, Brown Forman, Campari Group, Diageo India, John Distilleries, Moet Hennessy, Pernod Ricard, Suntory Global and William Grant & Sons.
According to Anant S Iyer, director general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), the Indian government has done commendable work in finalising the India-EU FTA deal, which will prove to be beneficial for both the trading partners.
While he agreed that a number of key concerns raised by the domestic alcobev industry seem to have been addressed, he said the domestic wine industry was hoping for a higher minimum import price (MIP) threshold of 3-3.5 euros than the 2.5 euros agreed upon.
“We also hope that the Indian government addresses our concerns relating to dumping of cheaper products by eliminating the possibility of undervalued import prices and checking under-invoicing and strictly adhering to ‘rules of origin’ clause so that they are not misused for re-routing a third country’s product. We also seek reciprocity and removal of non-tariff barriers on Indian spirits by the EU,” Iyer added.
Some domestic players are upbeat over the development. “Over the last decade, Indian distilleries have built technical depth in areas such as maturation, blending, compliance, and packaging. Many are already working with global suppliers for casks, yeast, and expertise. An FTA can support more of these exchanges, along with collaborative bottlings and shared know-how, instead of being limited to higher import volumes,” said Vicky Chand, director and CEO of homegrown alcobev company Radiant Manufacturers, maker of brands such as Castle Hill Dark Knight, Lost Treasure, etc.
A stable duty structure and duty rationalisation would not only help homegrown brands but also help in formalisation, compliance, and revenue mobilisation for the government, said Avneet Singh, CEO and founder of Indian beer company Medusa Beverages. “With the right regulatory support, homegrown alco-bev brands can scale up responsibly and help build stronger Indian brands, which can meaningfully contribute to economic growth while also aligning with social responsibility objectives,” he added.
“Any rationalisation of duties not only improves access and approachability for consumers but also enables the trade to curate deeper and more diverse beverage programmes. When these benefits are passed on, it helps build awareness, encourages trial and supports the long-term growth of wines and spirits consumption in the country,” said Sarthak Batra, co-founder of Delhi pub and bar IKI&GAI.
“If access to EU markets also opens up more meaningfully, Indian spirits won’t just be defending their home turf, they’ll be stepping onto the global stage on their own terms,” added Vikram Achanta, founder and CEO of beverage consulting company Tulleeho, and co-founder of 30BestBarsIndia and India Bartender Show.
Meanwhile, the FTA also establishes a working group on wines and spirits for the EU and India to exchange information and cooperate, for example, on oenological practices, as per a report released by the European Commission.