After India and the EU signed a free trade agreement last week, including tariff reductions on fine wine, WineCap CEO Alexander Westgarth discusses what an opening in the Indian wine market could mean for wine investment. Aberdeen Investments also assesses the impact of the US and India’s trade deal on various sectors.
The free trade deal between the EU and India will boost the fine
wine market, Alex Westgarth, CEO of London-based WineCap and Westgarth Wines
told this news service in an interview last Friday.
“For as long as I’ve worked in fine wine, there’s been an open
question about what would happen if India meaningfully opened its
market,” Westgarth said. “Lower tariffs won’t transform things
overnight, but they can change the trajectory of demand. With
global trade becoming more fragmented, India’s opening could
prove one of the most important long-term developments for fine
wine.”
Westgarth invests a lot in French fine wine, and sees India’s 150
per cent federal import tariff on wine as the single biggest
barrier to access. Westgarth said wine consumption in India was
less than 1 per cent of alcohol consumption in 2022 compared to
53 per cent for spirits and 46 per cent for beer. “Tariffs have
definitely affected the development of the market,” he told this
news service.
India’s per capita wine consumption reached 0.02 litres per
capita in 2024 to 2025 compared with 61 litres per capita in
Portugal, 42.7 litres per capita in Italy, 41.5 litres in France
and between 19.6 to 22.3 litres in the UK.
India’s wine market is already maturing, Westgarth said. It is
projected to grow from under $200 million in 2022 to over $700
million by 2030, driven by an expanding middle class,
and expected to reach 60 per cent of the population by 2047.
Under the agreement with the EU, tariffs will be cut from 150 per
cent to 20 per cent for premium wines and 30 per cent mid-range
wines, making European wines significantly cheaper. Duties on
spirits will be 40 per cent and 50 per cent on beer.
“The agreement brings stability to the fine wine market which has
been declining over the last couple of years, although it has
been improving in the last five months,” Westgarth said. The wine
market was buoyant during Covid when everyone was drinking a lot
and also when former US President Joe Biden cut tariffs. US
President Donald Trump has since increased them again. “Markets
peaked between June 2022 and March 2023 and bottomed out between
May 2025 and November 2025, falling by around 30 per cent,” he
continued. “Most sectors are up around 1.5 per cent to 2 per cent
since the bottom. Champagne was the first market to bottom out
and had about the largest fall, around 35 per cent. We noticed
this bottoming out with some of the largest brands in April last
year. The market became overheated but it is gradually improving
now.”
Beyond existing long-term collectors, Westgarth believes that
investing in fine wine as an alternative asset class is expected
to rise in India, with demand feeding into global markets via
established trading centres before any domestic investment
infrastructure develops.
Fine wine as an alternative investment offers effective
diversification for an investment portfolio. It has shown quite
strong performance against traditional asset classes with less
volatility, and performs well in times of high inflation, acting
as a hedge
Overall, India will reduce tariffs on 96.6 per cent of EU exports
under the deal, while the EU is set to reduce or eliminate
tariffs on almost all imports from India. The flip side is
that domestic industries will also need to adapt to intensifying
import competition. The EU is India’s second-largest trading
partner, accounting for 18 per cent of exports, just behind the
US (around 20 per cent), but India’s share of EU imports remains
just about 1–3 per cent across major categories such as
electronics, machinery, chemicals, and pharmaceuticals.
US/India trade deal
Under the agreement, the US will cut tariffs on Indian goods from
25 per cent to 18 per cent and remove the 25 per cent penalty
that was levied on India for purchasing Russian crude. “The deal
removes a key overhang for Indian equities, given that US tariff
risks were a key pressure point for the Indian equity market. For
most of 2025, the absence of progress on US tariffs kept foreign
investors cautious and led to India’s stock market lagging global
and regional peers in 2025 after several prior years of
outperformance,” James Thom, senior investment director of Asian
Equities at Aberdeen
Investments, said this week. “With this coming shortly after
India sealed a landmark Free Trade Agreement with the European
Union, the timing alone could reset investor sentiment and growth
expectations significantly after a weak 2025.”
“While the direct macro impact is modest, there is far more
meaningful impact on sentiment towards India as a market, given
it draws a line under a period of significant uncertainty,” he
continued. “Businesses within India can now start to plan
again and hopefully start putting capital to work, supporting the
long-awaited revival in the private sector capex cycle. Foreign
investors, that have been largely absent from India, can start
once again to make clearer assessments of investment
opportunities in India.”
“The biggest immediate winners are in India’s labour-intensive
export base, where textiles, apparel, leather, gems and
jewellery, toys, and furniture get more support and could regain
ground lost to Vietnam and other more cost-competitive
countries,” Thom said. “Medium and smaller companies, which had
borne the brunt of the 50 per cent rate, also get some relief
finally. Removing that overhang should also support banks,
non-banking financial companies and export-oriented
manufacturers, while lifting retail sentiment in small and
mid-caps.”
Meanwhile, this week, Mark Matthews, head of research Asia at
Swiss private bank Julius Baer, reaffirmed
his overweight position on India. However, he continues to favour
large caps, with a high-conviction preference for financials,
consumption, information technology, and export-oriented sectors
that now gain an immediate global competitive edge.