Fine wine news

There could be some time yet before India becomes a hotbed for wine trading as consumers and investors are failing to realise its potential.

Speaking to the Financial Times (FT), Kulbir Singh, president of the Indian Wine Society, said that wine appreciation in India is still a minority interest.

However, he said that the market is slowly expanding, with low-end wines appealing to Indian consumers first.

One of the reasons for the lack of interest is the country's tax system.

"The tax structure which is quite ridiculous," Mr Singh told the news provider. "A €2 (£1.6) to €3 bottle turns into a Rp1,000 (£12) one."

Indeed, a tariff regime on imported wines in India is at least 150 per cent, with individual states applying their own taxes.

Free trade agreements are being discussed between India and the EU and if successful, the country could go the same way as China, which took advantage of an end to high taxes on imports.

Figures from Ditton Wine Traders and cited by the FT show that India imports just 100,000 cases of wine a year, with Sri Lanka and the Maldives importing more bottles. Consumption, meanwhile, is just two teaspoons per adult in India a year, a figure which is in stark contrast to China's consumption of 4.5 litres or almost 30 litres in the UK.

However, the wine industry remains optimistic. Last year, trade events such as Vinitaly put a heavy focus on emerging markets from Brazil to India in the hope that greater wealth of inhabitants would follow on China's lead.

China now imports 2.5 million cases of Bordeaux each year, signifying the potential markets other countries like India could provide.

Rajiv Singhal, director of Helsinki-based Fine Publishing India, told the news provider, however, that comparisons between India and China's wine markets are "a long shot".

"The country is not ready to displace anyone, or take up slack from overstocked or crashing markets," he remarked.

Posted by John Yates