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.  â€śBusinesses 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.