Report Highlights: 

FAS Mumbai forecasts Indian 2014 wine production at a record 17.3 million liters as cooler temperatures during February and March improved grape yields and quality. Depending on the data source, there is an apparent 2014 uptick in imports of certain “new world” wines from Australia, the United States, and others while imports from France and Italy have fallen.

Production Up and Quality Improved on Better Conditions 

The 2014 wine production estimate for the states of Maharashtra and Karnataka is 14.2 million liters (1.58 million cases at 12 bottles per case of 750 milliliters each). The fortified wine (also referred to as port) production estimate in Goa is 3.1 million liters (344,000 cases) as sources report business continues expanding. In Maharashtra, weather conditions were mixed during the grape ripening period; however, cooler temperatures during February and March led to better yield and quality. While there was some hail damage, affected areas were few and localized. Production in Karnataka has increased steadily and was estimated at 5 million liters (555,000 cases), a jump of 1.3 million liters (145,000 cases) from the previous year as key wineries expanded production. Generally, sources report Indian wineries are struggling to source adequate grape supplies as growers have switched to table grapes and other crops in recent years. 

Total Imports Continue Sliding While New World Wine Imports Up - Maybe 

The Indian Ministry of Commerce reports that wine imports in 2013 equaled nearly 4 million liters and totaled almost U.S. $25 million. In the first seven months of 2014, imports are just over 1.7 million liters and have totaled just over U.S. $10 million. In comparison with the first seven months of 2013, import volumes and values are down by over 27 percent and 28 percent, respectively. Some sources attribute the slide to inconsistencies and difficulties interpreting the Indian Government position on wine product labeling and product approvals. The Indian reported trade data suggests that wine imports from “new world” wine countries is growing; especially for Australian, American, South African and New Zealand products. However, the top 3 wine suppliers to India are France, Australia, and Italy. 

Wine exports in 2013 equaled nearly 1.8 million liters valued at nearly U.S. $7 million per the Ministry of Commerce data. In the first seven month of 2014, exports have increased 20 percent as fueled by growth of sweeter variety wine exports to Bhutan and Vietnam. Export sales have grown almost 40 percent by value in the first seven months of 2014 as compared to 2013 and have reached nearly U.S. $4.4 million. Wine industry sources reported to FAS Mumbai that continued sales are expected in these aforementioned export destinations. Additionally, sources report that there is good demand for Indian fruit wines (e.g., lychee and mango) in markets like Japan where products fit niche needs. 

India is often touted as an important emerging market for wine, but sources report that sales have lagged behind expectations for the past several years. Sources report that nearly half of all imported wine is for the hotel sector (including; hotel restaurants, catered events and receptions). Retail sources have reported that grocery-store sales are an emerging area as high-end chains are dedicating spaces to wines. However, sales are largely of domestic wines as imported products sell very infrequently as consumers are unfamiliar with imported brands, the wine growing regions and characteristics of such wines as well as the retail prices which are pushed higher due to import tariffs. 

Trade Data Anomaly Deserving Additional Attention 

It is common to see trade data vary between what one country reports for its imports and another country reports for its exports. Timeliness of trade, manner of trade, invoices versus scale weights, recorded data as FOB or CIF, and several other factors can create such anomalies. However, it could be worth additional investigation to understand why certain discrepancies exist with Indian wine import data and other country export data. For example, 2013 Indian import data for French wine is 1,296,000 liters whereas France reported its wine exports to India were much lower at 524,000 liters. Similarly, Indian data on imported wine from Australia is 415,000 liters whereas Australian export data is much higher and shows 787,000 liters. 

FAS Mumbai speculates that the discrepancy could be due to sales being destined to “Duty Free” stores which are a large market for wine buying. Another possible cause could be that imported wine has been held in-bond and not captured by data collectors as goods have not been presented to Indian Customs until clarity over the Food Safety and Standards Authority of India (FSSAI) labeling and product requirements receives greater clarity. Another couple of factors could be that transshipment or consolidated shipments of wine occurs or, as evidenced in the Indian data, wine is categorized as coming from an “unidentified country”