Synopsis: India’s trade deal with the EU could sharply cut import duties on wines, whiskies and beers, making European alcohol cheaper in India. While this benefits consumers, analysts warn it may increase competition for domestic players like United Spirits, Radico Khaitan and Sula Vineyards, especially in premium segments.
A new trade agreement could soon make imported wines and whiskies cheaper in India, changing what consumers see, and choose on store shelves. While lower prices sound like good news for drinkers, they may quietly reshape competition in the liquor market. Could cheaper European alcohol put pressure on Indian players like United Spirits, Radico Khaitan and Sula Vineyards?
India-EU FTA
Imported wines, whiskies and beers from Europe are likely to become much cheaper in India after the country finalised a free trade agreement with the European Union. Leaders from both sides have called the deal historic, saying it marks one of the most important trade agreements signed by India in recent years.
Under the agreement, India will cut import duties on several alcoholic beverages, which could lower retail prices and improve access to premium European brands in the domestic market. The pact was formally concluded, bringing an end to negotiations that began in 2007 and stretched for nearly 18 years.
Officials said the agreement is aimed at helping both India and the EU deal with global economic challenges, strengthen supply chains and reduce reliance on a limited set of trading partners. The FTA covers trade in goods and services and includes tariff reductions or removals on close to 97 percent of EU exports to India, leading to estimated annual duty savings of up to EUR 4 billion for European exporters.
Is Your Whiskey Getting Cheaper?
Imported alcohol prices in India are expected to come down after the proposed reduction in import duties under the India-EU trade agreement. At present, import duties on wine can go up to 150 percent. Under the new framework, duties on premium European wines will be brought down to 20 percent, while mid-priced wines will face a tariff of 30 percent. Wines priced below EUR 2.5 will not be covered by these concessions.
Similar reductions are planned for spirits and beer. Import duties on products such as whisky, vodka, rum and gin, which currently go as high as 150 percent, will be reduced to 40 percent. Beer imports will see duties fall from around 110 percent to 50 percent, a move that could lower prices for several European beer brands, especially in large cities and tourist destinations. The changes are expected to support imports from major wine-producing countries such as France, Italy, Spain and Germany, along with categories like Scotch whisky, Irish whiskey, European craft gins and continental beer labels.
According to officials, the duty cuts have been structured in a phased manner, similar to India’s trade agreements with Australia and New Zealand. An official said that sectors such as wine are important export segments for partner countries, and therefore tariff relief has been provided gradually. “The concessions have been designed in a calibrated manner, with duties being reduced over a period of seven years,” the official said.
Among the wine brands likely to benefit are labels from Bordeaux and Burgundy in France, Champagne, Barolo and Barbaresco from Italy, Ribera del Duero wines from Spain, and premium French dessert wines. In spirits, brands such as Jameson, Tullamore, Bushmills, Mackmyra and Stauning fall within the affected categories. Vodka brands include Absolut, Grey Goose, Belvedere, Ketel One, Ciroc and Wodka Gorbatschow, while beer labels include Hoegaarden, Stella Artois, Beck’s, Heineken, Erdinger, Paulaner and Amstel.
How Is It A Threat For Players Like United Spirits, Radico Khaitan, Sula Vineyards & Others?
The India-EU free trade agreement has brought renewed focus on how lower import duties could change competitive dynamics for domestic alcohol makers, especially those with a strong presence in premium and luxury categories. Companies such as United Spirits, Radico Khaitan and Sula Vineyards operate across segments that may now face closer pricing pressure from imported European brands.
Radico Khaitan: The Magic Moments Maker
Radico Khaitan operates across mass, premium and luxury categories, with a strong focus on higher-value brands. Its premium and luxury portfolio includes Rampur Indian Single Malt Whiskies, Rampur 1943 Virasat, Jaisalmer Indian Craft Gin, Royal Ranthambore Heritage Collection, Morpheus Rare Luxury Whisky and The Spirit of Kashmyr Luxury Vodka. In vodka, the company’s Magic Moments range remains one of its most recognisable brands.
In the premium mass segment, Radico owns well-known labels such as 8 PM Whisky, After Dark Blue Whisky, Contessa Rum and Old Admiral Brandy. Several of these brands compete closely with imported European spirits, especially in vodka, whisky and gin, where pricing and brand positioning are key.
United Spirits: Domestic Leader With Global Brands
United Spirits manufactures, sells and distributes some of the most well-known global and domestic alcohol brands in India. Its portfolio includes Johnnie Walker, Black Dog, Black & White, VAT 69, Antiquity, Signature, The Singleton, Royal Challenge, McDowell’s No1, Smirnoff, Ketel One, Tanqueray and Captain Morgan. The company also owns Godawan, an Indian artisanal single malt whisky positioned in the premium segment.
With exposure across mass and premium categories, United Spirits competes both with domestic peers and imported labels. Any narrowing of the price gap between imported European spirits and locally produced premium brands could directly affect consumer choice in the higher-end segments.
Sula Vineyards: Market Leader in Indian Wine
Sula Vineyards is India’s largest wine company, with more than 50 percent share of the domestic premium wine market. The company has a portfolio of over 60 labels across different price points and also operates a well-established wine tourism business. Sula produces and distributes over one million cases of wine annually across the country.
In a recent press release, Sula’s management addressed concerns around the India-EU FTA. The company noted that any reduction in import duties would apply only to wines priced above a minimum import price of EUR 2.5 per 750 ml bottle on a CIF basis. Wines imported below this level would continue to attract the existing 150 percent duty. According to the company, this structure protects more than 90 percent of Indian wines, which retail below Rs. 1,500 per bottle.
Sula also pointed to the India-Australia FTA as a reference, where duty reductions were phased over a decade. It expects a similar approach for European wines, with the first cut taking duties to around 75 percent after one year, gradually reducing to about 20 percent for premium wines and 30 percent for mid-priced wines over a seven to ten year period. The company said it expects only a limited impact, largely restricted to its most premium RASA range, supported by strong brands such as Sula, The Source, RASA and Dindori Reserve and growing traction in wine tourism.
Analyst’s Views
Karan Taurani of Elara Securities said the development is negative for domestic liquor makers, a view reflected in the fall in share prices of Sula Vineyards, United Breweries and Radico Khaitan following the announcement. Unlike the India-UK FTA, which helped Indian players through lower bulk Scotch costs and margin support, the India-EU agreement is expected to be more product-focused. Taurani said this could narrow the price gap between imported European brands and domestic premium offerings, particularly in the spirits segment.
Elara’s analysis suggests that Glenfiddich single malt could become nearly 5 percent cheaper than Rampur single malt. Similarly, the price premium of Absolut Vodka over Magic Moments Dazzle Vanilla could narrow to about 13 percent from 26 percent earlier. This reduces the price advantage that domestic premium brands have traditionally enjoyed over imports, making competition more intense in the high-end segment.
While beer import duties are proposed to be cut from 110 percent to 50 percent, Elara expects limited competitive impact in this category. Beer in India continues to face high taxes based on alcohol-by-volume, resulting in low operating margins even for leading players. Additionally, most global beer companies such as AB InBev, Carlsberg and Heineken have already localised production, giving them a cost edge over imported products. In contrast, the single malt segment, though still small at under one million cases, could see faster growth as more UK and EU products enter the market. While this may expand the category, it also raises competition for Indian single malt brands.
What Should Investors Do?
Elara has highlighted Radico Khaitan as a key company to track, given its exposure to vodka and premium spirits. Vodka accounts for nearly 60 percent of Radico’s volumes, while its luxury and semi-luxury segments are growing at 30 to 40 percent year-on-year, with a sales salience of around 8 to 9 percent. Any slowdown in this growth could affect overall performance, though margin support from the India-UK FTA may offer some cushion.
Lower bulk Scotch duties are expected to improve gross margins by around 60 basis points for both Radico Khaitan and United Spirits. Elara said it remains positive on these companies but will closely monitor volume growth in their premium portfolios.
The brokerage also cautioned that other domestic players with premium-heavy portfolios, including Tilaknagar Industries, Allied Blenders and Distillers, and Pernod Ricard India, could face higher competitive pressure as the India-EU FTA is implemented.
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