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India is uncorking its wine market

The wine market in India has grown by 40 per cent and about 1,70,000 cases of wine are consumed by Indians annually.

business Updated: May 10, 2007 15:57 IST

Making its debut at the Spanish Wine Fair (Fenavin), India said it would welcome imports of Spanish wines and collaborations in production, if a strong element of "price sensitivity" was introduced.

"However, price sensitivity does not necessarily mean selling the cheapest wine," Subhash Arora, president of the Delhi Wine Club, told delegates at the three-day fair held on Wednesday.

India already has a well developed domestic industry that also exports the commodity, he cautioned, adding, however, that there was scope for good brands of wine in the niche market.

The best way to come to India would be by entering into partnerships in trade and production. French, Italians, Australians and Germans were already making their presence felt in the country, Arora said.

While India regularly participates in Vinexpo at Bordeaux, France, Vinitaly at Verona, Italy, Prowein at Dusseldorf, Germany, and the London Wine Fair in Britain, its participation in Fenavin is a first.

Arora also elaborated on what he called "the Indian paradox", where millions drink despite religious and social taboos. Consumption of hard liquor was high - 120 million cases of whisky, vodka and other drinks and 105 million cases of beer every year.

"Add 200 million cases of country liquor and a sizable number that is unaccounted for, and 500 million cases of liquor are annually consumed. This is the Indian paradox," he said.

At the same time, wine, treated as part of food in the West, was shunned because of its alcohol content. Even so, 170,000 cases were consumed every year and the market had grown by 40 per cent last year.

"You can vote at the age of 18. Girls can even get married at the age of 18. Yet the legal drinking age is 25. This is also part of the Indian paradox," he said.

"Our finance minister (P Chidambaram) and commerce minister (Kamal Nath) are both connoisseurs of fine wine. The minister of agriculture (Sharad Pawar) is a big grape farmer and has gone on record to say that wine should be treated as a food item, like in Italy and Spain. But he had to backtrack due to the anti-alcohol lobby and the wine continues to be subject to VAT at 20 per cent," Arora said.

However, he added that with a nine per cent-plus growth rate and a rapid expansion of organised retail, India offers bright prospects to outside wine merchants.