The Golden Decade of Indian Wine

The European Union and India signed a landmark free trade agreement in New Delhi on Tuesday, creating one of the world’s largest free trade zones. The deal covers two billion people and accounts for about 25% of global GDP and a third of international trade. Among the sectors set to benefit most is wine, which has faced steep barriers in India until now.

For decades, India imposed a basic customs duty of 150% on imported wines, making foreign bottles a rare luxury for most consumers. This high tariff, combined with fragmented state taxes that can add another 50–70% to the final price, kept the market largely closed to international producers. Domestic wineries, exempt from these duties, have dominated the market, controlling between 60% and 70% of total volume.

The new agreement will gradually reduce tariffs on European wines over seven years. For premium wines priced above €10, tariffs will fall from 150% to 20%. Mid-range wines between €2.5 and €10 will see tariffs drop to 30%. This change follows the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), which already lowered tariffs for Australian wines and allowed them to capture nearly 40% of India’s import market.

India’s wine market is entering what analysts call a “Golden Decade.” While wine consumption in Europe and the United States is stagnating or declining, India is projected to grow at a compound annual rate between 14.7% and 17.41% through 2033. Market valuations vary depending on methodology, but estimates for 2024 range from $229 million to $783.7 million, with projections reaching as high as $2.66 billion by 2033.

Several factors are driving this growth. India has a young population with a median age of 28 and about 600 million people above the legal drinking age. Urbanization is rapid, especially in Tier-1 and Tier-2 cities, where wine is increasingly seen as an aspirational lifestyle product. Women now make up more than 30% of wine consumers in major cities, breaking previous social taboos around alcohol consumption.

Premiumization is another key trend. Indian consumers are spending more per bottle, especially on red wines, which are perceived as healthier than spirits like whisky or rum. Red wine holds a 49% share of the market, favored for its compatibility with spicy Indian cuisine. Cabernet Sauvignon and Shiraz are the most popular varietals. White wine accounts for about 13–15%, with a shift underway from sweet Chenin Blanc to drier Sauvignon Blanc styles. Sparkling wine is growing quickly due to changing wedding traditions and aggressive marketing by brands like Chandon (LVMH). Rosé is also gaining ground, particularly among younger urban consumers.

The domestic industry is led by three main players: Sula Vineyards, Fratelli Vineyards, and Grover Zampa Vineyards. Sula is the only publicly listed wine company in India and has shifted its focus toward premium brands, which now make up more than 80% of its portfolio. The company has also invested heavily in wine tourism at its Nashik facilities, which saw revenue grow by over 11% in late 2025 despite fewer visitors—indicating higher spending per guest.

Fratelli Vineyards holds about one-third of the national premium segment and recently completed a share swap with Tinna Trade Ltd., giving it a public listing under its new name. The company focuses on Italian varietals such as Sangiovese grown in Maharashtra’s Akluj region. Grover Zampa received a $10.4 million capital injection in late 2024 aimed at modernizing its operations and expanding into northern India.

Imports have historically been limited by tariffs but are now poised for rapid growth as trade agreements take effect. In the first half of 2025, India imported 2.58 million liters of wine valued at $12.55 million—a robust increase over previous years when statistical anomalies distorted official figures.

Australia currently leads among importers due to its FTA advantages, accounting for up to 44% of imported volume. France dominates the luxury segment and five-star hotels with Champagne and other high-end offerings, while Italy’s presence is driven by Prosecco and culinary popularity in restaurants and hotels. Chile faces tariff disadvantages compared to Australia but remains competitive on price-quality ratio; U.S. wines have seen value growth of about 32%, led by Californian brands.

Despite these positive trends, significant challenges remain for both domestic producers and foreign entrants. Alcohol regulation in India is managed at the state level, resulting in a patchwork of rules covering excise taxes, labeling requirements, distribution channels, and even outright prohibition in some states like Gujarat. Logistics are another concern: maintaining an unbroken cold chain is essential due to India’s tropical climate but remains difficult outside major cities.

Indian consumers are highly price-sensitive; if prices rise too quickly due to taxes or margins, many will switch back to local spirits or beer rather than pay more for wine.

Looking ahead to 2030, analysts expect import growth to exceed a compound annual rate of 20%. The most intense competition will be in the INR 1,500–2,500 ($18–$30) price bracket where premium domestic wines will face off against newly affordable imports from Europe and Australia.

For global wine producers seeking entry into this fast-growing market, success will depend not only on competitive pricing but also on consumer education and building strong distribution networks—especially within hotels, restaurants, and catering channels that drive much of India’s premium wine consumption.

The EU-India free trade agreement marks a turning point for the industry by opening access to one of the world’s last untapped major markets just as others begin to contract or stagnate. As tariffs fall and consumer preferences evolve rapidly over the next decade, both domestic wineries and international brands will need to adapt quickly to capture their share of this emerging opportunity.