Wine makers from Australia, Europe and the United States are interested in entering the Indian market through tie-ups with a handful of experienced wine importers. Despite the unfavorable domestic tax structure, India’s wine imports have been growing at 12-13%. Imported wines account for about 35% of the country’s total wine consumption in terms of value but only about 12% in terms of volume.
French wine maker Vignobles Arbeau recently launched its own label in collaboration with Tetrad Global Beverages, founded by career wine maker Abhay Kewadkar. “Many wine makers from the USA, Australia and EU are exploring opportunities to enter Indian wine market. The segment of imported wines is growing at about 12-14% because it is aspirational to drink imported wines. Also, some grape varietals do not grow in India,” said Kewadkar.
Most of the imported wines cost Rs 1,300-1,900 per bottle. According to a latest report of the United States Department of Agriculture (USDA), the largest wine suppliers to India are Australia and the European Union, accounting for almost 75% of India’s wine imports.
Wine imports from Australia have overtaken imports from the European Union countries. According to Wine Australia, for the year ended December 2018, Australian wine exports to India grew in volume and value by 50% and 52% respectively.
A report of the Australian Trade and Investment Commission data shows how the traditional wine making countries look at the Indian market. “In a country with a population of 1.3 billion and where around 700 million people are above the legal drinking age – a number growing by 19 million a year – India is a market with many opportunities for Australia’s winemakers,” said the Commission.
The Indian government has allowed five-star hotels to import wines duty-free while other importers have to pay a duty of 150%. Therefore, sale of imported wines mostly takes place at five-star hotels. The domestic wine industry has raised objections, saying the duty-free import licences given to five-star hotels should be removed as early as possible.