New Delhi, April 4: After tea and coffee, it’s time for a wine board. The government, which has been hit by demands of European nations to lower duties on wines and spirits, now wants to set up a board to encourage wine making in India and promote them abroad.

Rising incomes, changing social values and global exposure have seen the Indian middle class taking to wine drinking in a major way with sales increasing by up to 30 per cent annually. Local brands have also started making an appearance on global tables.

Sangli and Nashik regions in Maharashtra, Bangalore in Karnataka and Kulu region in Himachal Pradesh have emerged as Indian wine-making districts and the government hopes to not only promote these areas but also find new geo-climatic zones for wine making.

Minister of food processing Subodh Kant Sahai has already forwarded a note on this issue to other ministries. The government’s plans to set up a wine board follow recommendations of an inter-ministerial joint working group set up to look into the issue of de-linking wine from hard liquor.

Rukn Luthra, assistant vice-president of Seagrams India, said: “The timing of the Wine Board is right as wine business is expanding in India.”

At present, the size of the wine market is around Rs 250-300 crore, and in five years it is expected to grow to around Rs 500 crore.

However, India still consumes just about 3.5 million bottles a year, which translates into a pathetic half teaspoon per head against France, which consumes 60 litres per head, while Italy's per capita consumption is 59 litres, Spain’s is 37 and UK’s is 24 litres.

Luthra said, “If we promote Indian wines abroad, the wine business would certainly expand.” The board, industry hopes, will also help regularise and maintain the standards of Indian wine. “All the stakeholders are going to benefit — right from the farmers, to the wineries and also the consumers,” Luthra said.

Taking advantage of the boom and the possibility of India joining the likes of Chile, South Africa and Australia as emerging wine exporters, Indian spirits companies are planning to enter the wine market, which is dominated by niche players.

The industry is dominated by three players — Indage, Sula Wines and Grover Vineyards — and enjoys more than 90 per cent of the total market share.

United Spirits will set up a winery in Baramati, Maharashtra, in collaboration with a French company, said Abhay Kewadkar, senior vice-president of the company. The capacity is going to be 3.5 million bottles and by the next five years it is going to produce 5-7 million bottles.

Kewadkar said, “It (the Board plan) is a welcome gesture from the government and it is very encouraging for the wine industry.”

But questions abound. Kewadkar asked, “Are professionals from the industry going to be included in the board? What is their involvement going to be? Will they be allowed to form policies and list key areas? How will it be ensured that the proposals are implemented?”

Globally, the wine industry is worth $15 billion or Rs 65,000 crore. In contrast, Indian wine business is just worth about Rs 200 crore. However, India is the fastest growing market in the Asia-Pacific and possibly in the world, reporting consistent growth rates of 25-30 per cent.