In this article, Ashwini Gehlot discusses the laws regulating the production of Wine in India.

Among BRICS nations, India has the least per capita consumption of wine: around 19 ml, against 8.1 liters in Russia, 2.26 liters in Brazil, 7.0 liters in South Africa, and 0.9 liters in China.

Indian Wine Industry

India is not customarily a wine drinking nation. Because of prior time of restriction in India and higher price as compared to spirits like brandy and whisky made in the country, the production and consumption of wine in India are negligible when compared with various other countries. The setting up of Champagne Indage’s plant in 1984 in the province of Maharashtra denoted the production of wine on an organized scale in India. commercial wine manufacturing is coming into existence in  the1980s in India.

The accompanying elements have added to India’s low wine consumption-

• Poor transport facilities
• Poor storage
• Stringent and backward government rules with various tax collection across different states
• Unfavorable standards for domestic marketing of wines aside from in a few States
• Lack of promotional activities for wine utilization in the nation

The Indian wine industry has been constantly evolving over the past 10 years. Wine is step by step turning into a part of urban Indian way of life. Since India joined the WTO, import taxes in the nation have been astoundingly lessened, accordingly empowering foreign exporters to exploit India’s huge consumer market. The wine market is bit by bit opening up as quantitative limitations are being lifted, import duties are being brought down and domestic regulations are being untangled.

The accompanying components are adding to the higher consumption of wine in India-

• Rising incomes of Indian populace
• Growth in the foreign tourist
• Exposure to new culture
• Changing demography
• Loosening of Government policies and regulations

Types Of Wines Available In India

There are fundamentally three sorts of wine available in India-

1. Premium Wines (Still wines): In this class, the Indian market is isolated principally into two noteworthy classifications – White and Red wines;
2. Sparkling Wines: This wine is for the most part considered to fall into the White wine classification by numerous consumers;
3. Fortified wines: This is not yet made or viewed as quality wines.

All the wines which are available in the above-mentioned categories are further divided into 3 categories-

• Domestic Indian Wine: This is the wine, which is manufactured from Indian grapes and packaged in India by the domestic wineries. ·
• Foreign Bulk Wine Bottled in India: A couple of huge domestic producers import bulk wine and pack it in India.
• Foreign Wine Bottled in birthplace: approximately 200 and above are currently available in this category and they are transported in by Importers, Domestic players, and Foreign players.

Production Of Wine In India

“India has 123, 000 acres of vineyards, of which only 1% are utilized for wine manufacturing. India‘s first winery was set up amid the 1980s and by 2000 there were only 6 working wineries. Manufacturing consequently expanded rapidly, cresting at approximately 13.0 million liters (1.4 million cases) in 2010, preceding dropping in 2011 and 2012.” 

The below mentioned 3 wine companies are presently manufacturing/producing wines in India-

• Chateau Indage Limited, Pune
• Sula Vineyards, Nasik
• Grover Vineyards Limited, Bangalore

There are no official production statistics, but state excise information with industry estimates give a genuinely dependable sign of recent manufacture/production levels.  Excise data of Sangli (Maharashtra) shows that production was 641,000 liters (71,200 cases) in the financial year 2010/11 and 233,000 liters (25,900 cases) in the financial year 2011/12. Excise data from Karnataka shows that the state manufactured 2.9 million liters (322,200 cases) during Indian fiscal year (April/March) 2010/2011 and 3.2 million liters (355,500 cases) during financial year 2011/12. According to Industry sources, the approximately total wine manufacturing is 11.5 million liters from 2,000 hectares of grapes in 2012.

Consumption Of Wine In India

The domestic wine utilization touched more than 10 million liters in 2007 and may go up to 15 million liters for the present year, from a negligible 1 million liters in 2001.

About 80% of the demand for wine comes from these major cities as mentioned below with their consumption pattern, namely – Mumbai (39%), New Delhi (23%), Kolkata, Goa  (9%), Chennai, Bangalore (9%) and Pune and the rest of India has just 20% consumption.  The total wine consumption in India is around 400,000 cases a year of which 85% are table wines and the remaining are the costly assortments. Out of the 400,000 cases, around 50,000 cases are foreign from different sources. Today, the utilization/consumption per head is about 0.0030 liter for each annum.

Duty Regime

Customs Duty / Excise Duty

• The excise duty on wine has been expanded from 100% to the most extreme reasonable rate of 150%.
• India rejected extra excise duty on imported alcohol, beer and wine following an objection by the European Union and the US in the World Trade Organization. So the customs duty has been waived on wine.
• The instruction/education cess applicable on the imports of wine has been rejected in 2007.

Local Taxes

• The Central Government has endorsed a most extreme state excise of 25% for wine in different states.
• In Kerala, the rate of Import expense for imported wine is Rs. 2 for every mass liter. · Maharashtra has expelled excise duty on wine.
• Haryana has lessened the excise duty for wine to Rs.20.50 liter from Rs.32.25 liter per proof liter. Furthermore, it has decreased the export duty to half for the domestic business.

Value Added Tax (VAT)

• Delhi – 20%, Maharashtra – 20%, Chandigarh – 4%, Haryana – 20%, Tamil Nadu – 53%, Karnataka – No VAT, Kerala – 12.5%

Foreign Direct Investment Policy

• The approach for distillation of liquor has been reported vide Press Note 4 (2006) as per this report, FDI up to 100% is allowed under the automatic route for brewing and distillation of liquor subject to licensing by the suitable authority.

Key Wine Importers

The most famous imported wine marks in India are from France, and French wines represent half of the aggregate imports in value terms. Italian wines are the second most noteworthy imported, trailed by Australia. 72,000 wine cases are transported in basically by Sansula, ITDC, E and J Gallo, Brindco and other private businesses. The number of wine merchants in India is developing at the rate of 30% with the list of importers expanding each year.

The following are the key wine importers in India

• Brindco Sales Ltd. (Delhi)
• Sonarys Co-Brands Pvt. Ltd. (Mumbai)
• International Global Tax (Delhi)
• Mohan Brothers RR (Delhi)
• Fairmacs Shipstores Pvt. Ltd. (Chennai)
• RR International (Delhi and Mumbai)
• Kiara Wines (Mumbai)
• Star X wines (Delhi)

Localisation of the Wine Industry

The following are the major wine producing regions in the country:

1. Sangli Region (Maharashtra)
2. Nashik Region (Maharashtra)

• The majority of the Indian wineries are situated in these two areas including the largest Sula Vineyards and Chateau Indage. There are 54 wineries in the country. Out of them, 52 wineries are in Maharashtra, incorporating 8 in Sangli, 28 wineries in Nasik, 9 in Pune, 2 in Buldhana, 3 in Solapur and 1 in Usmanabad. The Maharashtra Industrial Development Corporation has set up 2 Wine Parks in the State: Palus, close Sangli (53.70 Hectares) and Vinchur, close Nasik (151.36 Hectares).

3. Bangalore Region (Karnataka)- The third biggest wine maker of India, Grover Vineyards has its winery placed in this area.
4. Himachal Region (Himachal Pradesh)- Chateau Indage has planted Cabernet, merlot, and sauvignon blanc grape assortments in Kullu and Manali where it is wanting to get into manufacturing in three years.

Major Indian Wine Companies

Most of the wineries in India are situated in Nashik in  Maharashtra. Currently, India has around 60 wineries with an expected venture of about USD 60 million. The accompanying three wine companies are the real wine manufacturing/producing companies in India:

• Chateau Indage Limited, Pune
• Grover Vineyards Limited, Bangalore
• Sula Vineyards, Mumbai

The following are the other top Indian wine companies

• ND Wines
• Renaissance Wines
• Sankalp Wines
• Vinicola
• Flamingo Wines
• Mandala Valley
• Vintage Wines

Other Wineries

• Indo Grape Winery
• Girana Valley Vineyard
• Sahyadri Hills Vineyards and much more.

Licenses

Licensing procedure differ state by state; a few states disallow the sale of liquor, some prohibit the sale of liquor beverages and others have state-run restraining infrastructures that control the distribution of liquor. In general, distributors, importers, restaurants retailers and hotels must have a license to deal with liquor beverages. In a few states, licenses are further described to take into consideration things like room service sales of liquor. Licenses are ordinarily subject to yearly renewal fees. State permitting and distribution structures are depicted in the Table.

Brand/Label Registration

Distributors and importers are required to register or in some cases label the brand with the state excise department for showcasing the brand/label in the state. The state excise office charges a fixed registration expense, and the registration must be renewed each year. In a few states, importers are too required to mention the MRP(Maximum Retail Price) for the wine at the time of registration.

The state excise office, at the time of registration, gives guidelines and rules on specific labeling prerequisites for sale. State specific labeling guidelines may include:

• Available to be purchased in the state of xxxxxxx as it were’.
• Liquor Consumption is Injurious to Health’ in English
• Maximum Retail Price (MRP) Rs. xxx.xx only.

Transport Permits

Subsequent to accepting an order from a licensed purchaser/buyer, the licensed merchant/distributor applies for a transport license from the excise office. License and permits are normally issued after payment of sales charge (VAT), state excise tax, and other pertinent taxes.

The Food And Drug Administration (FDA) – Procedure For Obtaining A License To Operate.

“According to the new Food Safety Standards Act, wine goes under the food category. As there are worries over quality, we are intending to make licenses compulsory for wineries and wine retailers (shops),”

ANNEXURE A

General requirements for License to Operate (LTO)

1. Authenticated Accomplished Application for Authorization Form (Annex A-1)
2. Evidence of Registration
3. In the event of Single Proprietorship, legitimate Certificate of Business Name Registration with the Department of Trade and Industry.
4. On the off chance that Corporation or Partnership, legitimate Registration with Securities and Exchange Commission (SEC) and Articles of Incorporation or Partnership.
5. In case of Cooperative, legitimate Certificate from Cooperative Development Authorities and by laws
6. Verification of Occupancy – Office
7. Substantial authenticated Contract of Lease/Certificate of Occupancy/Sub-Lease.
8. Transfer Certificate of Title (TCT) if claimed and authenticated Certificate of Occupancy (if possessed by one of the incorporators).
9. Clearance from the Building/Condominium Administration permitting the utilization of the unit for business purposes – as fundamental.
10. Verification of Occupancy – Warehouse or Stockroom
11. Substantial authenticated Contract of Lease/Certificate of Occupancy/Sub-Lease.
12. Transfer Certificate of Title (TCT) if claimed and authenticated Certificate of Occupancy (if possessed by one of the incorporators).
13. Substantial legally approved Warehousing Agreement (Third Party Logistics)
14. Confirmation of Occupancy – Manufacturer Photocopy of Notarized substantial Contract of Lease of the building/space possessed (if space/bldg. is not claimed).
15. Photocopy of Notarized Fixed Asset and Operating Capital or Financial Statement, if material.
16. Area Site/Plan (Indicate location, size, sort of building, immediate environment).
17. Floor Plan/Lay out with measurement.
18. Conditional list of food items to be distributed or produced recognized in light of its arrangement (domestic or imported) and classification (Annex L) (Low/medium/high hazard).
19. A copy of Proposed Label (for the local producer)/test label of the item to be imported or a computerized picture of the document in an FDA-affirmed document type.

ANNEXURE B

Requirements for the Renewal of LTO

 Regular Renewal:

1. It should be done on or before the issuance date of the license.
2. Submit most recent Financial Statement appropriately signed by a CPA or most recent BIR.

Automatic Renewal:

1. The application is filed before the termination date of the permit/license;
2. The endorsed renewal fee is paid after filing of the application; and
3. A sworn statement demonstrating no change or variety at all in the establishment is attached to the application.

ANNEXURE D

Classification Of Processed Food Products

 A. Low-risk Category –

Food that is probably not going to contain pathogenic microorganisms and won’t typically bolster their development because of food characteristics or type. Wine is included in this category of food products.

ANNEXURE E

Initial/ Regular Renewal For Low-risk Category:

1. Totally filled up Assessment Slip
2. Application Letter with Product List for Locally produced items
3. A duplicate of substantial FDA License to Operate
4. Totally filled up Product List
5. One sample in business presentation OR an advanced/digital picture of the item and its packaging no less than 1024 x 768 pixels in estimate, and in an FDA-affirmed file type
6. For locally manufactured items/products-One real loose label connected in the documents OR a digital picture of the item and its bundling no less than 1024 x 768 pixels in measure, and in an FDA-affirmed file type
7. For imported items/products-
8. One genuine loose label attached in the reports/documents with a sticker showing the complete name and address of the Importer OR a digital image of the item and its packaging no less than 1024 x 768 pixels in size, and in an FDA-endorsed document sort.
9. Authenticated Affidavit of Undertaking with item list for imported items.

References

1. indialawoffices.com. (n.d.). Indian Wine Industry. [online] Available at: http://www.indialawoffices.com/ilo_pdf/industry-reports/wineindustry.pdf [Accessed 19 Jul. 2017].
2. Sood, D. (2012). Wine Market Update 2012. [online] Available at: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Wine%20Market%20Update%202012_New%20Delhi_India_12-14-2012.pdf [Accessed 19 Jul. 2017].
3. Chandra, A. (2014). Investment required in wine. [online] Business-standard.com. Available at: http://www.business-standard.com/article/beyond-business/investment-required-in-wine-114072501471_1.html [Accessed 19 Jul. 2017].
4. indianwineacademy.com. (n.d.). COMPREHENSIVE STUDY OF THE INDIAN WINE MARKET. [online] Available at: http://www.indianwineacademy.com/comprehensive_study_iwm_reference_section.pdf [Accessed 19 Jul. 2017].
5. Pawar, T. (n.d.). Soon, licence system for wine makers – Times of India. [online] The Times of India. Available at: http://timesofindia.indiatimes.com/city/nashik/Soon-licence-system-for-wine-makers/articleshow/13787969.cms [Accessed 19 Jul. 2017].
6. fda.gov.ph. (n.d.). Requirements for License to Operate (LTO) – OPENING/ INITIAL. [online] Available at: http://www.fda.gov.ph/attachments/article/71149/Annex%20to%20Food%20AO%20-%20Annex%20A%20to%20H.pdf [Accessed 19 Jul. 2017].