India Cuts Tariffs on New Zealand Wine to 75% Under New Trade Deal

New Zealand’s newly signed free trade agreement with India will cut Indian tariffs on New Zealand wine from 150% to 75% in the first year, a move industry speakers said could make premium bottles more reachable for Indian consumers while still leaving major barriers in place at the state and distribution level.

The agreement was a central topic at the New Zealand Wine 2026 Wine Business Forum in Wellington in August, where Sonal C Holland, a Master of Wine and a prominent wine commentator in India, told producers that the deal should be seen as the start of a long market-building effort rather than a quick export breakthrough.

Holland said India is one of the world’s largest drinks markets, worth more than US$55 billion, though it is still dominated by spirits. Wine accounts for a little more than US$300 million of that total, and New Zealand’s share is very small, at about NZ$438,000, according to figures cited at the forum. Even so, she said the country’s rising incomes, large younger population and growing interest in premium products make it a market that exporters cannot ignore.

The tariff cut matters because it lowers one of the biggest price barriers for New Zealand wine in India and could alter the competitive balance in a market where imported alcoholic beverages often struggle to gain traction. For the broader drinks sector, the change may help reorder competition for shelf space, import partnerships and consumer attention as more producers look at India as a long-term growth market.

Holland said the tariff reduction will not, by itself, make India easy to enter. Import duty is only one part of the final retail price, she said, with state-level taxes, warehousing, logistics, distribution and marketing costs all adding to the price paid by consumers. India’s 28 states also maintain separate excise rules, creating a fragmented regulatory system that can complicate entry plans for foreign suppliers.

In her remarks, Holland urged New Zealand wineries not to wait for the full effects of the trade pact before entering the market. She said companies that move early may have a better chance of securing importer relationships and retail space before competition intensifies. Australia is already expanding in India, she said, and the European Union concluded its own free trade agreement with India last year.

In that context, Holland argued that the New Zealand-India agreement does not create a unique edge so much as remove a disadvantage. She said New Zealand producers would still need to rely on brand strength, quality and market education to win consumers.

The case for India rests in part on demographics. Holland said nearly 60% of India’s population is under 35, a sharp contrast with older wine-drinking populations in the United States, the United Kingdom and Western Europe. She said many Indian consumers are not only drinking more but also trading up, moving from mass-market products to premium spirits, craft beer and wine. She described wine in India as carrying an image of moderation, health and aspiration, making it more socially acceptable for some consumers than other alcohol categories.

Women are becoming an important growth group for wine in India, Holland said, citing research showing they are adopting the category faster than other groups. She also pointed to growing interest in wine education, high-end dinners and wine tourism. Well-traveled Indian consumers who try wine abroad often return home with greater interest in the category, she said.

That consumer shift has also helped domestic wine tourism in India. Holland said Sula Vineyards in Nashik has posted 21% year-over-year growth, an indication that wine is becoming part of a broader lifestyle market. She told producers that New Zealand could benefit not only by exporting bottles into India but also by attracting Indian visitors to its own wine regions, then building sales when those travelers return home and look for the same labels.

Charlotte Read, general manager for brand at New Zealand Winegrowers, said the forum’s theme, “Winning in Changing Markets,” reflected the wider pressures facing the industry. She said wine is competing for attention in a more complex consumer environment shaped by economic strain and changing drinking habits. Even so, she said New Zealand wine has remained resilient because of its international reputation for quality, sustainability and premium positioning.

The discussion in Wellington also widened beyond India. New Zealand Trade and Enterprise’s head of business development in South Korea, You Jin Lee, said South Korea remains a promising market even as growth has cooled this year. She told forum delegates that New Zealand now holds the top position in white wine in South Korea with a 32% share. Exports to that market rose from $10 million in 2020 to just over $50 million in 2025, although figures have softened in 2026.

Lee said South Korean consumers still have relatively low awareness of New Zealand wine, but those who try it respond strongly. She described that gap as an opportunity rather than a weakness. Alcohol consumption is deeply embedded in South Korean social life, she said, traditionally centered on beer and soju, but white wine has been gaining ground. She added that female consumers have played a role in that shift, especially through demand for fresh, fruit-forward styles.

The forum’s focus on India and South Korea came as exporters assess where future growth may come from at a time when mature markets are proving harder to navigate. In a separate presentation, Wine Business Monthly Managing Editor Erin Kirschenmann said the United States market is going through a structural reset rather than a temporary slowdown. She pointed to disruption in distribution, trade uncertainty linked to tariffs and a rapidly changing consumer base.

Kirschenmann said New Zealand has been one of the few countries still showing value growth in the U.S. market, helped in part by the strength of Sauvignon Blanc. But her broader point was that producers can no longer rely on old selling strategies or assume that distributors will do the work of creating demand.

Taken together, the messages from the Wellington forum suggest that New Zealand wine producers are being pushed to think more like long-term market builders than traditional exporters. In India, that means dealing with a tariff cut that improves headline access but leaves a difficult regulatory and tax structure in place. It also means moving into a market where imported wine could become more visible as price barriers come down, but where success will still depend on local partnerships, patient investment and sustained education of both trade buyers and consumers.