Over the last 15 years, fine wine has delivered an average annualised return of 10.6 per cent, consistently outperforming many traditional investment markets. For a long time, this asset class was treated as the exclusive territory of European collectors as well as billionaires from Hong Kong. Now, India is entering the conversation, quietly.
According to WineCap, investing in fine wine as an alternative asset in India is expected to rise meaningfully. This will be a direct result of a growing pool of people of ultra-high net-worth, who are looking beyond equities and real estate to diversify their portfolios. Also, the India-EU Free Trade Agreement, signed earlier this year and inclusive of tariff reductions on fine wine, has further accelerated the momentum.
But one thing that is important for people to know is that fine wine investment is not as straightforward as picking up a bottle of something expensive and hoping it appreciates. To make things easier, here’s a beginner’s guide to fine wine investment for Indian buyers.
All the investment-worthy wines share a specific set of characteristics that make them stand out. Firstly, they come from producers with an established track record of quality. Second, they are made with limited qualities. Third, they have the structural capacity to age and improve over decades. And lastly, they are actively traded on the global secondary market.
Here, the key benchmark is the Liv-ex Fine Wine 1000 Index, which is also the most widely tracked index in the fine wine trading world. This index monitors price performance across the world’s most traded wines, and those bottles that consistently appear on this list come from a handful of regions. Bordeaux remains the largest by traded volume, accounting for roughly 40 per cent of global fine wine trade. Following this is Burgundy with around 25 per cent, and Champagne accounts for approximately 15 per cent. Italian wines, particularly those from Tuscany and Piedmont, are also growing rapidly in investor interest; so are select producers from the Napa Valley and the Rhône Valley.
This is where most Indians end up hitting a wall, largely because of a lack of knowledge. Fine wines that are purchased for investment purposes are mostly stored overseas. These locations often include bonded warehouses in London, Bordeaux, or Hong Kong. This means that money needs to move out of India in a legally compliant manner.
The primary and the easiest route is the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), which allows resident Indians to remit up to USD2,50,000 (approximately INR2.1 crore) per individual per financial year for permitted capital account transactions, including overseas investments. Families can pool their individual limits by making each member a co-owner of the investment portfolio.
From April 2025 onwards, no Tax Collected at Source (TCS) applies on LRS remittances up to INR10 lakh per financial year. Above this threshold, a TCS of 20 per cent is levied. But, it is essential to note that this is not a financial tax and can be claimed as a credit or refund when filing your Income Tax Return (ITR). Apart from this, all remittances require a PAN card and the filing of Form A2 through an authorised dealer bank. Additionally, Indian investors are required to disclose foreign holdings in Schedule FA when filing their annual ITR. Failure to do so can attract penalties under the Black Money Act.
In terms of tax on gains, profits from fine wine investments held for 24 months or more are subject to long-term capital gains tax of 20 per cent in India. Whereas, gains from wines held for less than 24 months are taxed as per the investor’s income tax slab.
Before making your first purchase, there are a few rules that you need to keep in mind.
Fine wine is a long-term asset, which most investors hold for a minimum of five years, and the best returns often come from holding through a full market cycle.
Always buy from reputable merchants or established wine investment platforms that offer independent third-party bonded storage.
Work with a tax advisor who understands both the LRS compliance framework and the foreign asset disclosure requirements.