India is poised for a wine boom, driven by rising affluence, a young population and a shifting regulatory landscape. But success in the world’s third-largest alcohol market will depend on how well producers navigate high tariffs, fragmented state policies and complex labeling rules.
Speaking at Vinexpo Asia in Singapore, India’s first Master of Wine, Sonal Holland, said the country’s wine market has reached a turning point. “There’s never been a better time to enter the Indian market,” she told wine professionals at the trade fair.
India’s alcohol market is valued at US$55 billion and is expected to expand further as the country prepares to overtake Germany as the world’s third-largest economy. While spirits continue to dominate, wine is gaining ground among middle-class and urban consumers, particularly in cities like Mumbai, Bengaluru and Delhi.
“Wine is now a mainstream beverage,” Holland said. “It’s on every restaurant and bar menu. Retail spaces have moved from dusty, overheated shops to modern wine boutiques.”
About 70% of wine in India is consumed off-trade, and while online alcohol sales remain largely banned, some states are exploring legal frameworks for e-commerce, she added.
Urban Markets Drive Consumption
Mumbai remains India’s biggest wine hub, handling roughly 80% of the country’s imports and housing the largest number of wine importers. Bengaluru, known as India’s tech capital, is one of the fastest-growing markets due to its affluent and international population. Delhi NCR, an affluent and status-driven region, has strong demand for premium imports, but local policy barriers continue to hinder access.
Holland dismissed concerns that India is heading toward prohibition, noting that while a few states remain dry, alcohol revenues in the rest of the country far outweigh any losses.
Rosé on the rise
Red wine still leads consumption at 65%, followed by white wine at 17%, with rosé and sparkling wines making up the remainder. Rosé wine, once an afterthought, is now “the fastest-growing category” remarks Holland, especially among younger drinkers. Seen as romantic, refreshing, and suited for daytime drinking, rosé is enjoying what Holland calls “its moment in the sun.”
Despite limited consumer knowledge—most buyers recognize wines only by color or country—aspiration and occasion-based consumption remain strong drivers. Imported wines are perceived as superior, and branding plays a major role. South Africa’s ‘Chocolate Block’ has become a success story in India due to its name and presentation.
Young and Thirsty
India’s demographic profile gives it a unique advantage. The country has 600 million people aged 18 to 35, and 20 million reach legal drinking age each year. Contrary to trends in Western markets, where Gen Z is embracing sobriety, India’s youth is drinking, she notes, and in many cases, drinking more than previous generations. “Indian kids are drinking as much as anywhere else, if not more,” Holland remarked.
Women are also a key growth segment. With 700 million women in India, many of whom live in joint family households, social taboos around alcohol have historically limited female consumption. But wine, seen as elegant and less intoxicating than spirits, is becoming more widely accepted.
Tariffs and Labelling Laws Remain Barriers
But the road to India’s wine drinker is far from straightforward: a fragmented regulatory framework, punishing tariffs and opaque data have long restrained the sector in a market traditionally dominated by brown spirits.
Imported wines currently make up about one-third of total wine consumption—similar to the U.S.—but that share is expected to grow. Australian wines have led the charge following a free trade agreement with India that slashed tariffs from 150% to 75%, and eventually to 25% by 2032.
A recently signed UK-India FTA saw India’s tariffs on whisky and gin halved from 150% to 75% and will eventually dropped to 40% by the 10th year of the deal. Holland said the agreement could serve as a model for future deals with the EU and the United States.
“Now it’s the time more than ever before to enter the Indian market,” she said. “The only thing standing between success is tax.”
Indeed, India’s complex import duty structure remains a formidable barrier, with each state imposing its own rates on top of the federal 150% import tariff on wines. Similar to the US, India has its three-tier system, complicating wine imports and distribution.
This results in significant price inflation: a US$10 ex-cellar bottle can often retail for around US$100 after import duties, state levies, and distribution costs are applied. In premium on-trade venues such as hotels and restaurants, the final price can rise even further due to substantial mark-ups.
This results in significant price inflation: a US$10 ex-cellar bottle can often retail for around US$100 after import duties, state levies, and distribution costs are applied. In premium on-trade venues such as hotels and restaurants, the final price can rise even further due to substantial mark-ups.
India’s food safety agency, FSSAI, also enforces strict labeling rules. Labels must be pre-printed at origin, be compliant with state-specific laws, and include a back label with mandatory details such as expiry date. Relabeling after shipment is prohibited. Labels featuring nudity, religious symbols or culturally sensitive artwork are often rejected.
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