On January 26, 2026, the European Union and India concluded negotiations on a landmark Free Trade Agreement, creating a free trade zone of nearly 2 billion people. The deal eliminates or reduces tariffs on 96.6% of EU goods exports to India by value. EU exports are projected to double by 2032, with estimated annual duty savings of around €4 billion for European producers – numbers that highlight the deal’s scale, but reveal little about which players will actually capture the value.
For the alcohol sector, the changes are substantial but phased. Indian tariffs on EU wines will drop from 150% to 75% upon entry into force, eventually reaching as low as 20% for premium wines and 30% for mid-range. Spirits tariffs will halve initially and gradually fall to 40%, while beer duties decline from 110% to 50%. The agreement awaits ratification by the European Parliament, Council, and Indian authorities before entering force.
In a global context where traditional markets face structural limits – saturated demand in Europe and the US, generational shifts toward RTDs and no/low alcohol, and rising trade fragmentation – the FTA offers EU producers access to one of the few large markets still in an early pricing stage. India combines population scale, rapid middle-class growth, and comparatively lower geopolitical friction than other large emerging markets. This is less about chasing explosive short-term gains and more about strategic diversification: reallocating some growth expectations to a market that remains under-penetrated by premium imports.
The opportunity, however, is sharply time-differentiated across categories.
Spirits: 0–3 Year Window for Visible Gains India is already the world’s second-largest spirits market by volume, heavily whisky-driven, with a well-established culture of premium consumption. EU spirits exports to India have grown sixfold over the past decade despite 150% tariffs. The reduction to 40% is a clear accelerator.
The cultural friction cost is low: consumers already drink spirits and understand price-quality trade-offs. They do not need convincing to drink alcohol – only guidance on which brand and at what price point. Distribution networks for imported whisky, gin, and cognac are relatively mature in urban centers. Industry voices, including spiritsEUROPE, describe the deal as a “game changer” that will unlock long-term growth, attract investment, and expand choice without displacing domestic production. Large players with existing presence – Irish whiskey, French cognac and other established EU spirits brands – stand to see quicker volume and margin improvements, potentially within the first few years post-ratification.
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Wine: 5-10 Year Play, Defensive in Nature Wine tells a different story. India’s per-capita consumption remains minimal, and the category still requires basic consumer education: why choose wine at all? Import growth has been solid – compound annual rate around 12%, with projections placing the market above $520 million by 2028 – but from a tiny base.
For EU wine, the FTA is primarily defensive. It prevents further lock-in to mature, slow-growth markets facing headwinds, rather than delivering immediate volume surges. Even with tariffs falling to 20–30%, state-level excise duties, labeling rules, distribution monopolies in many states, and high overall retail prices will keep the product premium and urban-focused. Penetration will depend on sustained brand-building, local partnerships, and gradual cultural shift among younger, affluent drinkers. Expect meaningful scale only after half a decade or more of consistent investment.
Beer: Largely Symbolic Beer tariffs drop to 50%, but India’s market is dominated by low-cost domestic brands. European imports will remain niche, with limited volume potential.
The FTA does not open India uniformly. It lowers the structural tariff barrier but leaves the real obstacles intact: multi-layered state regulations, compliance costs, channel control, and the sheer capital required for patient market development. The agreement screens entrants rather than welcoming all. Winners will be those producers – typically larger groups – that already view India as a long-term asset allocation, not a quick flip. Smaller or less-resourced players may struggle to convert tariff relief into meaningful share.
In the end, the EU-India FTA grants rights to enter one of the world’s most promising under-served markets. It does not guarantee success there. The differentiated timelines – fast for spirits, slow for wine – reflect fundamental differences in cultural readiness and channel maturity. The deal is a strategic step in a fragmenting global trade landscape, but execution will separate the prepared few from the rest.
