Imported European alcohol, including premium wines, spirits, and beer, may become up to 20% more affordable in India following the conclusion of the Free Trade Agreement (FTA) between India and the European Union.
Under the FTA, import duties on wines, currently at 150%, will be brought down to 20% for premium wines and 30% for medium-range wines. This massive cut in duties may reduce sticker prices of popular wines from France, Italy and Spain. Tariffs on whisky, vodka, rum and gin, which currently go as high as 150%, will be reduced to 40%. Similarly, import duties on beer will be reduced from 110% to 50%.
Vinod Giri, Director General, Brewers Association of India, said that the Irish whiskey and vodka category stands to gain the most from the FTA as they are dominated by European brands such as Bushmills, Absolut and Grey Goose.
“Irish whiskey and vodka makers boast of a strong distribution network in India and these categories could see prices drop by up to 20% if full tariff cuts are implemented,” said Giri. He added that there will be no immediate effects as the FTA is likely to take effect late next year.
“Premium wines will become cheaper in India but domestic players face minimal disruption given the sector’s small market size. The beer sector will likely see little change. Most major players already operate local facilities, allowing the FTA to serve mainly as a testing ground for new products before committing to expanded manufacturing or withdrawal,” he added.