Wine Industry in India: Past, present and future

It is common knowledge that India and world-class wine are not spoken in the same breath, but if the recent promotional events held all over the country are anything to go by, then all that is about to change. From organizing winemaking workshops to opening up the vineyards for spectacular wine tours, those associated with the wine industry are pulling out all the stops to lure consumers and to educate the masses about this sumptuous drink.

Although, wine has traditionally been consumed throughout history with evidence dating back to Harappa civilization, commercial wine production is a pretty recent phenomenon, with the first commercial grape wine plant being set up only in the 1980s. Since then, three major players – Chateau Indage, Grover Vineyards and Sula Vineyards – emerged in the domestic winemaking scene and the last few decades saw vineyards cropping up all over the country.

Then came the tide of globalization and India, bowing to WTO’s demands, had to reduce tariffs on imported liquor with the consequence that the market was suddenly flooded with incredibly refined Italian and French wines of unmatched quality – much to the delight of the wine lovers and to the woe of the Indian winemakers.

Coming back to the present times, finding a foothold in an arena that has been eternally dominated by European players (read: France, Italy, and Spain, in that order) has been quite an uphill task for Indian winemakers. However, the recent growth numbers – the wine market is currently growing at a rate of 25-30 per cent – have given them some cause to celebrate. A larger market translates to more demand, which in turn means that Indian wines can, now, share a shelf with their French and Italian counterparts. Moreover, Indians wines are considerably cheaper than their Western counterparts; thus enabling it to achieve a particular target audience of its own.

But the entire picture is not so rosy – the recent budget proposals with regards to hotel industries have industry experts fuming. According to the proposal, air-conditioned restaurants with a license to serve wine or any other liquor will now have to pay a service tax, in addition to the already existing VAT of 20-25 per cent on wine and liquor. This can lead to fall in wine and liquor consumption at restaurants, thus affecting the wine market. Despite this apparent setback, Indian wine companies are going to places like never before. Good Earth Winery, the Pune based winery owned by Girish Mhatre, has recently announced that its wines will be served at official functions in the Indian embassy in US.

Back home, statistics reveal that India’s rich and prosperous are finally warming up to this delicious drink; India has a wine market of roughly 1.2 million cases, while experts predict that consumption will grow at a CAGR of around 30% during 2009-2013. Lastly, right marketing strategies and increased awareness will go a long way to ensure that this historically significant drink finally conquers Indian hearts.

Tell us what you think.