India-EU trade pact: India offers 30% duty reduction on imported wine

Sula Vineyards sees limited impact only on premium range, lauds trade pact

India’s free trade agreement (FTA) with the European Union (EU) protects the country’s alcoholic beverages (alcobev) industry and will help it to become competitive as import duties are gradually reduced on select wines, said industry officials on Wednesday.

 

Final duties will be reduced over seven years, pegged at 30 per cent for wines priced between €2.50 and €10. For wines costing more than €10, final duties will be at 20 per cent.

 

“This will ensure sufficient time for the domestic sector to expand, innovate, and enhance global competitiveness,” government officials said.

 

The FTA offers no concession on wines priced less than €2.5, protecting wine producers and grape farmers in Maharashtra and Karnataka.

 

Sula Vineyards, the country’s largest wine producer, said the FTA will have a limited impact on its premium RASA range.

 

Praising the government for the FTA, it added that the key concerns of the Indian wine industry have been addressed with the establishment of a minimum import price of €2.5 per 750 ml bottle.

 

“We believe this framework delivers a balanced outcome, as it protects over 90 per cent of Indian wines, which retail at MRPs below Rs 1,500 per bottle, while also supporting the long-term expansion of the domestic wine market,” Sula said in an exchange filing on Wednesday.

 

The company said like the India-Australia FTA — it proposes to implement duty reductions over a decade — the new agreement will follow a similar phased approach for European wines. The first duty reduction to 75 per cent is expected after one year and gradually tapers to 20 per cent for premium wines and 30 per cent for mid-priced wines over a seven- to ten-year period.

 

Indian wine will enjoy preferential market access, with customs duties reduced from up to €32 per hectolitre to zero duty, either at entry into force or phased out over three to seven years from the entry into force of the agreement, government officials said.

 

India has also secured duty-free access for 85,000 tonnes of fresh grapes, getting significant relief from the EU Entry Price System, they said.

 

“Overall, we believe the agreement adequately safeguards the interests of the Indian wine industry,” Sula said in the filing.