Tax Cuts Set Off India Wine Boom
Hong Kong is at the height of its frenzied boom in fine wine auctions. And the government’s move to lift import taxes in 2008 ushered in an explosion in fine wine consumption in sales in all of greater China.
Now, wine experts say India could be next.
Jeannie Cho Lee, author of Mastering Wine, said:
“The sheer number of people in India who are getting wealthier and who have traveled, and who are not strictly practicing a certain religion and are much more international… that proportion of the population in India is growing.”
But the main hindrance to the potential boom in India’s wine market is prohibitively high alcohol taxes in key cities such as Delhi and Mumbai.
Lee says India may be well behind Hong Kong or China when it comes to wine consumption. But for wine producers who see the potential, this may be the time to get in.
“It’s never going to be that kind of open market as in Hong Kong, or have the same kind of growth potential as in China, but they do see that there’s a niche market. As soon as the regulations are relaxed, then there really will be a boom.”
Wine consumption in Asia has already seen double-digit growth over the past five to 10 years, as economies grow and people become savvy travelers. But one of the factors that may get in the way of higher sales and growth is import taxes.
Bottom line: Cash-rich emerging Asian markets, especially India, could see an explosion in wine consumption in the future, but high import taxes are a major hurdle.