Negotiations between India and the European Union (EU) on a long-awaited free trade agreement (FTA) have entered a decisive stage.
Both sides are working intensively to conclude a deal by the end of the year — a milestone that would signal India’s openness to deeper global integration and reinforce the EU’s external trade strategy.
For the wine industry, the outcome of these talks could be transformative. If India agrees to lower its steep tariffs of up to 150% on imported wines, the country’s emerging market of 1.4 billion people could unleash significant new opportunities for European producers.
Tariff Barriers at the Core of Negotiations
EU officials have repeatedly emphasized the need for India to cut import duties on sensitive products, including automobiles, medical equipment, spirits, dairy, and wines. Currently, imported wine faces some of the highest tariffs in the world, with federal duties of up to 150% compounded by state-level levies. This structure has long constrained market access despite India’s growing demand for premium beverages.
At an event in New Delhi, EU trade chief Maros Sefcovic stated:
“We are now maximising our efforts to finalise negotiations by the end of the year. A balanced agreement will unlock investment, reduce barriers, expand market access, and enhance supply chains, to the benefit of both sides.”
He was joined by EU Agriculture Commissioner Christophe Hansen, who is leading talks on agricultural products, dairy, and non-tariff barriers. On the Indian side, Trade Minister Piyush Goyal underlined the goal of achieving a “balanced and mutually beneficial deal” that advances trade, investment, and technology transfer.
India’s Growing Wine Market
India’s wine sector has shown robust growth despite tariff hurdles. In the first half of 2025, the country imported 2,585,127 liters of wine worth USD 12.55 million, marking a 50.3% increase in volume and 20.9% rise in value compared to the same period in 2024.
Australia’s experience demonstrates how tariff reductions can quickly reshape trade flows. Following the Australia-India Economic Cooperation and Trade Agreement (ECTA), Australia became India’s top wine supplier. Between January and June 2025, Australia shipped 1,005,262 liters worth USD 3.37 million, representing nearly 39% of India’s total wine imports. Under ECTA, tariffs on wines priced above USD 15 will gradually fall to 25% by 2032, while mid-range wines will see tariffs reduced to 50%.
In contrast, EU wines accounted for USD 4.05 million in imports during the first half of 2025, a modest 4% increase year-on-year. While still leading in value terms, European exporters face stronger competition unless tariffs and regulatory barriers are lowered.
What’s at Stake for European Producers
For European winemakers, the India-EU FTA could be a turning point. With growing disposable incomes and a youthful consumer base eager to explore premium beverages, India represents one of the most promising new frontiers. Lower tariffs could:
- Boost competitiveness of EU wines against Australian and domestic brands.
- Encourage long-term investments in distribution and marketing.
- Diversify export markets at a time when traditional outlets face economic and geopolitical pressures.
If negotiations succeed, the India-EU FTA would not only reshape bilateral trade flows but also redefine the global wine trade map, positioning India as a rising player and Europe as a key partner in its journey.
Source: Vino-Joy