Tax deal to uncork India for wine investors The trade deal could result in India finally being opened up to the wine investment market, with a consequent leap in demand. The abolition of tax on alcohol in China in 2008 resulted in Hong Kong becoming the world's premier wine trading hub. Last year Sotheby's made 52pc of total sales in Hong Kong, against 16pc in New York and 32pc in London. The total value of the sales was $85.5m (£54m). The current trade negotiations between the EU and the Indian government have been going on for four long years but - finally - a deal looks about to be struck in the coming months. This could have a dramatic impact on the global wine industry. Any deal would see India slash tariffs on imported alcohol in return for an opening-up of the European market to India. Imported wines currently face a 150pc tariff in India as well as an "extra additional duty" of 4pc. This is before any additional taxes imposed by India's individual states. These range from 30pc to more than 100pc and have made investing in wines relatively unattractive. The new agreement could see import duties slashed to just 40pc, boosting the sale of investment-grade wine. Comparisons have been drawn with the situation in Hong Kong in 2008, which saw the fine wine market explode after import taxes were scrapped altogether. However, Peter Shakeshaft, chief executive and founder of wine investment company Vin-X, believes that the impact of the agreement will be more gradual. "The changes will be big for investors," Mr Shakeshaft argues, but "we would not expect the market to explode like it did with Hong Kong." He does concede that any drop in import duty will have a beneficial effect for the fine wine investment market. India is a rapidly growing market and the demand will only get higher with the proposed changes. Wine also has a rich history in India and the country has a real affinity with certain labels of Bordeaux such as Chateau Cos d'Estournel. As a result we are able to predict individual labels which will benefit from the changes and advise investors accordingly," he adds. Like other areas of Asia, wine has hugely grown in popularity in India over the past decade, as a rapidly expanding middle and upper class scramble to get their hands on it. Wine imports have doubled to £17.8m over the last two years and with India's consumer markets expected to quadruple over the next two decades, the lowering of import duties could not come at a better time. There has also been some comments that a break-up of the eurozone may boost wine investments, as people scrabble to find "hard assets" to deploy their wealth. This argument is tenuous at best. Despite India's looming entry into the wine investment market, it looks likely that Chinese demand will continue to be the main driver. If the Chinese wine bubble eventually bursts, then the price of fine wines is likely to pop.