When India and the EU inked a long-awaited trade agreement in January, Sonal Holland, one of India’s leading wine experts, says her inbox was flooded with messages from European vintners eager to move into a significant, yet untapped market.
“That week alone, I had over 100 emails from producers all around Europe asking how they could enter India and how we could help them understand India better,” she says. “It has already created quite a bit of momentum . . . we are the world’s last hope, because every other market has let them down.”
The enthusiasm reflects the stagnating consumption and oversupply that the global wine industry is grappling with, as producers search for new drinkers.
India, with its rising affluence and taste for premium alcohol, has become a rare source of growth — despite being a difficult market in which to sell alcohol. Some states enforce prohibition and local taxes and regulations vary wildly across India.
The country’s wine consumption in 2024 was valued at almost $450mn based on retail prices, and is expected to rise 14 per cent by 2029, with volume growing about 7 per cent annually over the past five years, according to alcohol research company IWSR. It adds the global market value was flat at about $200bn in 2024 from a year earlier, and is set to fall 3 per cent by 2029.
Yet wine remains niche in India — worth just 1 per cent in value of all alcoholic beverages consumed — where liquor, notably whisky, is the top choice, says financial services group JM Financial.
The sector also faces competition from a renaissance in top line domestic spirits, particularly Indian single malts and craft gins, which have attracted younger drinkers and gained global recognition.
Wine Growers Association of India secretary Ashwin Rodrigues says wine has been at the “back of the queue”, adding: “They need to grow in value.”
Against that backdrop, the EU-India trade deal could reshape the industry. While yet to be ratified, it is expected to slash tariffs on European wines from 150 per cent to 75 per cent, and eventually as low as 20 per cent.
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The cut is set to deepen competition between French, Italian and Spanish imports and India’s three main producers: Sula, Fratelli and Grover Zampa. EU trade data showed wine exports to India rose 24 per cent to €9mn last year from 2024.
They are already under pressure. Sula, the largest winemaker that accounts for more than half of Indian volumes, in February reported a 68 per cent plunge in quarterly net profit because of weak demand and oversupply in the southern state of Karnataka, one of its biggest markets, where it decided to destock.
During the post-earnings call, Sula founder and chief executive Rajeev Samant described the three months ending in December as “probably the toughest quarter” since listing in 2022.
IWSR senior research consultant Jason Holway says: “There has not been enough of a recent emphasis on telling the story of wine in India.”
One local industry executive claims Indian winemakers have not focused enough on refining their output and instead spent too much effort lobbying to keep trade barriers high. “Today we’re paying the price for that.”
Sula has sought to assure investors that domestic bottle sales are unlikely to be wiped out by the more highly regarded imports. Its management says the initial halving of levies only kicks in for bottles retailing at about Rs1,700 ($18) in western Maharashtra, India’s richest state by GDP. That leaves the 95 per cent of Sula’s portfolio priced below that level protected.
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Some critics say the quality of Indian wines has improved in recent years and producers also see the opening of the market as an opportunity.
At a 55-acre vineyard in Doddaballapur in the foothills of the Nandi Hills outside the southern city of Bengaluru, one of India’s key wine growing regions alongside Nashik in the country’s west, workers are hand-picking grapes.
The fruit is taken to the winery of one of India’s oldest producers, Grover Zampa, to be fermented. At a tasting room, visitors sample batches as the staff talk about their premium varieties of Cabernet Sauvignon and Viognier.
Grover chief operating officer Sumit Jaiswal says: “We in fact might gain because if the Europeans and the Australians with this [free trade agreement] are able to invest in marketing and increase the drinking culture, that would really increase the pie,” adding that broader exposure to wine could help accelerate a cultural shift already under way among wealthier Indians.
“Wine will continue growing,” Jaiswal says, adding that efforts to promote the industry “is where things are sluggish”.
Part of that push is in wine tourism, with Grover investing in tasting rooms and restaurants at its vineyards outside of Bengaluru and in Nashik. Wineries in the region now attract hundreds of thousands of visitors every year.
Sula, a pioneer in wine tourism with some of the largest resorts, marked a record number of visitors in the final quarter of last year, with annual growth of 34 per cent.
Many are also releasing ready-to-drink wine-based beverages and cocktails to attract younger drinkers, including Grover which last year launched its Misfit sparkling spritzer.
Siddharth Thomas, majority shareholder representative from Grover’s Chennai-based conglomerate owner AV Thomas Group, says: “The industry is going through a time of challenges and change and we need to improvise and adapt.”
Wine Growers Association of India’s Rodrigues says producers are working with global partners to raise standards, including Australia to set up a wine laboratory in Nashik over the next six months.
“I hope everybody starts producing better wine, because otherwise high-price, low-quality wine with FTAs — it’s not going to work,” says Grover’s Jaiswal. “But we are equipped for it.”
