Sula Vineyards, Radico Khaitan and United Spirits fall up to 4% as European wines make cuts in India-EU trade deal

Shares of Sula Vineyards, Radico Khatain, United Spirits, United Breweries and Globus Spirits plunged to 4% as European wines will enter the Indian market at lower prices under the bilateral free trade agreement as India will grant import duty concessions under the pact, PTI reported, citing an official. According to the pact, excise duty on EU wines would drop from 150% to 20% (for expensive wines). There are no excise concessions for wines under 2.5 euros. The development gains significance as it is likely to increase competition for Indian manufacturers.

In today’s session, Sula Vineyards was the worst performer, falling 4% to the day’s low of Rs 186.50 on the BSE. Shares of Radico Khaitan fell 3% to Rs 2,877 per share, while shares of United Spirits fell as much as 2.5% to Rs 1,300 per share on the BSE. Shares of United Breweries fell 3% to Rs 1,401, while shares of Globus Spirits fell 3% to Rs 897.

Indian wines will also benefit from duty concessions in European Union member states following the conclusion of negotiations on a long-pending free trade agreement between India and the EU.

Under the agreement, India will expand duty concessions on wines from the European Union, largely in line with commitments made under the trade agreements with Australia and New Zealand, albeit with slightly lower thresholds. Wine was an important requirement for the EU during the negotiations. An official said the tariff cuts on EU wines will be implemented in a calibrated manner, with duties being phased out over a period of seven years, the PTI report said.

At the same time, Indian wines will gain better market access in EU Member States. The EU has agreed to remove duties on Indian wine, which officials say could help meet demand from the growing Indian diaspora in Europe. “Like cars, wine is one of the largest exports for the Indian industry. For them, this agreement is very important,” the official said.

India has taken a similar approach to its FTAs ​​with Australia and New Zealand, where wine tariffs are gradually reduced over an extended period. The deal with Australia sees tariffs gradually reduced over ten years, and the agreement with the EU sets similar timelines for the wine sector. In the alcoholic beverage segment, India’s exports to the EU include wines worth $1.4 million in 2024-25 and blended whiskies, vodka, brandy and liquors worth $24.5 million. Imports from the EU include wines worth $7.9 million, along with blended whiskies, cognac, gin, tequila, vodka and liqueurs worth $87.8 million.

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