Actually, the duty cuts announced today are even more significant for certain categories than a flat 50% reduction. Under the India-EU FTA finalized on January 27, 2026, the tariff structure for European alcohol has been split into specific tiers:
The New Alcohol Tariff Structure
While you mentioned a 50% cut, the actual “Future Tariffs” vary depending on the type of beverage:
| Beverage Type | Current Tariff | New FTA Tariff | Reduction Details |
| Premium Wine | 150% | 20% | Slashed to 75% at entry; eventually 20%. |
| Mid-range Wine | 150% | 30% | Phased reduction to 30%. |
| Spirits (Whisky, Gin, etc.) | 150% | 40% | A significant drop from the 150% federal cap. |
| Beer | 110% | 50% | This matches your 50% figure exactly. |
Key Highlights for Consumers
- The “Premium” Benefit: The steepest cuts are reserved for high-end European wines (primarily from France, Italy, and Spain) and luxury spirits like Scotch and Irish whiskey.
- Minimum Import Price (MIP): To protect the domestic Indian industry, these lower duties are often tied to a minimum price per bottle. Lower-value, mass-market European alcohol may still face higher protections to prevent “dumping.”
- State-Level Taxes: It is important to note that these are federal customs duties. State-level taxes (VAT and Excise) still apply and can often double the shelf price even with the lower import tariff.
- Phased Rollout: While the deal is “finalized,” the actual price drops will begin once the pact is ratified and comes into force, likely in early 2027.
Why 50% was a “Stickier” Number
The 50% figure was a major point of contention during the 18-year negotiation. The EU originally pushed for zero duties, while India’s domestic lobby (the Confederation of Indian Alcoholic Beverage Companies) fought to keep protections at 50% or higher. The final 20–40% range for premium goods represents a significant compromise by New Delhi.
