India-EU Free Trade Agreement Will Have Limited Impact on Indian Wine Industry, According to Sula Vineyards

Sula Vineyards, India's leading wine producer, has expressed satisfaction with the India-EU Free Trade Agreement (FTA), stating that it effectively protects the domestic wine sector. A minimum import price (MIP) of 2.5 euros per 750 ml bottle has been established to address key industry concerns. This measure aims to safeguard over 90% of Indian wines, which are priced below Rs 1,500 per bottle.

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The India-EU FTA negotiations concluded after 18 years, having started in 2007. The agreement is expected to be signed later this year and may be implemented early next year. It includes duty concessions for EU wines similar to those agreed upon with Australia and New Zealand, albeit with slightly lower thresholds.

India-EU Free Trade Agreement Details

Under the new agreement, Indian wines will gain market access in the EU, benefiting from duty eliminations. This move is anticipated to meet the demands of the expanding Indian diaspora in Europe. An official highlighted that this was a significant demand from the EU side during negotiations.

Sula Vineyards anticipates a phased reduction in duties for European wines, similar to the India-Australia FTA. Initially, a duty reduction to 75% is expected after one year. Over a period of 7-10 years, duties will gradually decrease to 20% for premium wines and 30% for mid-priced wines.

Impact on Domestic Wine Market

The framework is seen as a balanced outcome that supports the long-term growth of India's wine market while protecting local producers. Sula Vineyards believes this approach will foster expansion without compromising the interests of domestic wineries.

The India-EU FTA is poised to enhance trade relations between the two regions by providing mutual benefits. The agreement's provisions are designed to ensure fair competition and market access for both Indian and European wine industries.

Sula Vineyards stated, "Overall, we believe the agreement adequately safeguards the interests of the Indian wine industry." This sentiment reflects confidence in the measures taken to protect local producers while opening new opportunities abroad.

With inputs from PTI