India-EU FTA will have limited impact on Indian wine industry: Sula Vineyards

New Delhi: Sula Vineyards, India's largest wine company, on Wednesday said the India-EU Free Trade Agreement adequately safeguards the interests of the domestic wine industry.

The key concerns of the domestic wine industry have been addressed with the establishment of a minimum import price (MIP) of 2.5 euro per 750 ml bottle, Sula Vineyards said in a statement.

While final details of the revised India-EU FTA relating to wine are yet to be formally notified, it "believes this framework delivers a balanced outcome, as it protects over 90 per cent of Indian wines, which retail at MRPs below Rs 1,500 per bottle, while also supporting the long-term expansion of the domestic wine market".


Further, drawing parallels with the India-Australia FTA, where duty reductions were implemented gradually over a decade, Sula said it expects a similar phased approach for European wines in which first duty reduction to 75 per cent was expected after one year.

It will "gradually taper to 20 per cent for premium wines and 30 per cent for mid-priced wines over a 7-10 year period," the Maharashtra-based company said.

India and the European Union (EU) on Tuesday announced the conclusion and finalisation of negotiations for a free trade agreement. The agreement is expected to be signed later this year and may come into force from early next year. The talks were concluded after 18 years. The negotiations started in 2007.

Under the agreement, India will be giving duty concessions to the wines of the EU in line with what it has agreed for Australia and New Zealand, but with slightly lower thresholds.

It was a key demand for the EU.

The official said Indian wine, too, will get market access in the EU, which can cater to the demands of the growing Indian diaspora. The EU will eliminate duties for Indian wine.

"Overall, we believe the agreement adequately safeguards the interests of the Indian wine industry," said Sula.