With favourable policies, wine producing regions in India such as Nashik, Sangli and Pune could match the standards of Napa, Bordeaux and Tuscany In India, wine consumption currently may not be very high, but the country is certainly heading towards a silent revolution with India’s wine bowl Nashik at the centre of action. Currently, the wine market is concentrated in cities such as New Delhi, Mumbai, Kolkata, Pune and Bengaluru. Wine consumption in India stands at a meagre 4.6 ml per capita at present. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in a study titled ‘Wine Consumption in India’ had pointed out that the Indian wine market is poised to grow at 25-30% by 2010 due to rising consumption of wine among all age groups.
Star hotels and restaurants are offering what they call ‘Champagne Brunches’ with unlimited champagne and wine. The influence of the West and rising disposable income among people entail that a major chunk of the population can now afford wine.
Govt initiatives
Various measures undertaken by the government such as reduction in duties on wine, removal of restrictions on distribution by permitting wine to be sold in supermarkets and incentives for wineries to establish new facilities have provided a fillip to the wine market. Currently, 41% of wine is consumed in western India and 29% in North India. This is because the Government of Maharashtra is encouraging wine manufacturers by setting up grape wine parks. The Maharashtra Grape Processing Industrial Policy, which waived off excise duty on home-made wine in 2001, has boosted the fledgling sector. Cities such as Bengaluru and Chandigarh have adopted the liberal policy of allowing the sale of wine in supermarkets. In this regard, the recent statement by Union minister for agriculture Sharad Pawar suggesting that wine should be sold in supermarkets alongside colas is a welcome step. This will greatly enrich the rural regions of Maharashtra, thereby enabling wine producing regions such as Nashik, Sangli and Pune to match the standards of Napa, Bordeaux and Tuscany in the coming days.
 Challenges and road ahead One of the major bottlenecks in the growth path of the Indian wine market is the complex tax regulations. Different states have different laws to regulate production, importation and distribution of wine. Some states have seven to eight categories of duties. For instance, if wine is to be imported from Maharashtra into Karnataka, the state levies an additional excise duty between Rs 18 and Rs 70 per litre based on certain slabs and an import duty of Rs 300 per litre. Similarly, if wine manufactured in other states is sold in Maharashtra, the state imposes 150% duty on the base price of wine bottle.
There are particular disciplinary duties on imports from other wine producing countries and even other wine producing states within India. Unless this scenario changes, the wine market in India will continue to face difficulties. A uniform tax structure would encourage more companies to enter the liquor business. Further, labelling too requires some uniformity. Unified label laws from all the state governments will benefit wineries to market the product quickly across the country.
Other constraints facing the domestic wine market include poor transport system and storage facilities as well as unfavourable rules for marketing wine in India. Some of the measures recommended to the government to support the wine industry include creation of proper infrastructure, uniform taxation and better methods of promotion and sales and endorsing classification of Indian wine regions.
Nitin Desai, CMD of Vinsura Vineries Pvt Ltd, a mid-sized Indian premium wine manufacturer and exporter in Nashik |
