Wine in India maturing under pressure

Even though the younger generation is steadily embracing wine and helping shape a nascent wine culture in India, the category continues to face an uphill climb. Sales remain modest, not for lack of interest, but because state-level taxation, regulatory hurdles, and inconsistent policies continue to slow progress. As Sanjeev Gupta and Dr. Rolly Sharma, Directors - High Spirits, emphasise, unlocking the true potential of India’s wine market will require sustained policy reforms and efforts to make wine more accessible and affordable.

If there is one thing that those in the wine business agree on, it is the fact that the wine market is indeed growing in India, albeit at a slower pace compared to previous years. Demand is rising across all market segments, but it is particularly noticeable among higher-income groups. In terms of pricing, it is a global trend that products with lower price tags tend to sell more than premium ones. In India, wines priced under ₹2,000 per bottle remain the most popular.

An additional factor contributing to this growth is the increasing interest shown by younger consumers. While it is true that spirits companies are investing heavily to engage Generation Z and millennials, these younger consumers are also more curious, informed, and conscious of how wine differs from hard liquor. “They tend to be experimental and do not stick to a particular beverage. The tide can turn at any time, and we are doing our best to reach younger audiences and hopefully establish a long term relationship,” says Sanjeev. For High Spirits, the trajectory has been consistently upward, with significant growth in sales. 

Road Ahead

India continues to be a nascent market with an ever-evolving wine culture. Brands like Fishing Cat are performing well, thanks to competitive pricing. “We strive to offer great value for our customers’ money, and that’s why Fishing Cat has been the highestselling imported wine in Delhi for over two years,” says Rolly. Around 80 percent of their business comes from hotels and restaurants, with the remaining 20 percent from retail.

Looking ahead, producers and importers expect growing demand for low-alcohol and sustainable wines over the next 10–15 years.

The Obstacles

Wine can sustain a business, but not without challenges. The wine trade in India is both risky and volatile, often disrupted by sudden policy changes. Smaller companies, in particular, struggle to adapt quickly to these shifts, sometimes incurring substantial losses.

One of the biggest obstacles to the wine industry’s growth is the complex and high-cost tax regime. Imported wines face a heavy burden of customs duties, excise taxes, and VAT, which collectively stunt market expansion, especially in states with strong business potential. “Additionally, brand registration processes and associated fees are tedious and costly. They drain both company finances and time, which could otherwise be invested in growing the business,” notes Rolly. 

While discussions around free trade agreements (FTAs) with other countries are ongoing, there is little movement in terms of reforms to state-level policies. “I’m not sure we’ll see any real change in the foreseeable future, but I remain hopeful that one day, the longevity and sustainability of businesses will be prioritised,” Sanjeev adds.

Wine producers and importers believe that beverages such as wine and beer should be placed in a separate category from hard liquor, sold through departmental stores, and taxed at lower rates. Though there have been policy changes, the overall impact has been unfavourable. For example, until a few years ago, wine and beer were sold in department stores in Delhi, but this was discontinued and store owners subsequently had their liquor licences revoked.