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Delhi Wine Club

Posted: Monday, July 07 2008. 10:31

Highlights of Karnataka Grape Processing and Wine Policy – 2007

1.         Identification and declaration of suitable areas for the cultivation wine varieties in the state

The State Government has identified the areas that are suitable for growing of grape varieties required for the production of good quality wines.  The region suitable for cultivating wine grapes in Bangalore (U), Bangalore (R) and Kolar districts has been declared as Nandi Valley. The region comprising Bijapur, Bagalkot and Belgaum districts has been declared as Krishna Valley.

2.         Wineries are Horticultural and Food Processing Industries

The grape wine production units have been declared as the Horticultural and Food Processing Industries and accordingly will receive all the incentives and facilities meant for such industries.

3.         Simplification of the rules related to getting lands for production of    grape wine varieties and production of Wine.

a)                 The Government intends to establish two Wine Parks.  The land required for this purpose will be acquired through the Karnataka Industrial Area Development Board (KIADB) and all the incentives and facilities declared in the new Industrial Policy 2006-11 will be provided to these wine parks. 

          The facilities intended to be provided to the wine parks from the Commerce and Industries Department will be routed through the Department of Horticulture.

b)                 The entrepreneurs intending to establish wineries are eligible for getting the facilities available under Section 109 of the Karnataka Land Reforms Act.

c)                 The Government will encourage and assist the companies, which are going to take-up contract cultivation.

d)                 The nationalized banks will be requested to provide credit to the grape growers at reduced rate of interest and for easy sanctioning of loans.  Priorities will be given to the growers of wine varieties while getting the back ended subsidy for cultivation.

4.         Simplification of rules while issuing License and Permit to the Wineries.

The Licensing system to be followed for getting license for the wineries from the Revenue Department has been simplified.  The licenses to wineries will be issued at the district level and the concerned district Deputy Commissioners will be empowered to clear the license applications within 30 days of applying.

5.                 Sale of wines at the winery premises

In order to promote wine tourism the licensed wineries will be allowed to sell wine to the visitors who are interested in buying for self consumption.

6.         Capital Investment Subsidy

The Government of India, through the Department of Food Processing Industries, is implementing a scheme for providing 25% subsidy, to the Agriculture and Food Processing Units, with a ceiling of Rs. 5 million per unit ($120,000).  The Government of Karnataka is going to recommend the wineries for the subsidy under the above mentioned provision.

7.         Subsidy for Grape Processing

Under the provisions of the Industrial Policy – 2006, a subsidy of 50% for the installation of machineries required for Agro-based Industries, is extended for grape processing units also.

8.         Providing Training

Training will be rendered to the wine grape growers through seminars, workshops, study tours, expert consultations, demonstrations, etc.

9.         Incentives for marketing and distribution of wines

a)                 License Fee for Wine Sales - An amount of Rs. 5000 ($120) per annum will be charged as license fee for the sales of wine; this fee will not be reviewed for the next 10 years.
b)                 State Government Excise Registration Fee - The State Government excise registration fee levied for the wineries is fixed at Rs. 5000/- per annum.
c)                 Sales of Wine in Bars and Restaurants- In order to encourage  wine producers and to facilitate sales, it is permitted to hold sale of wines through wine-taverns, apart from the point of production.  For this, a fee of Rs. 2000 ($38) will be levied per annum.  Further, permission is granted to undertake sale of wines in bottles in the bars, which have obtained license for the wholesale trade of wines.
d)                 Concession in Excise Duty- The presently levied Additional Excise Duty is reduced to Rs. 2 per liter of the wine produced in the State.  For the wine which is brought to Karnataka from other states this duty will be four- fold.
e)                 Label Registration Fee- The Label Registration Fee is waived off for all brands of wines; this will not be reviewed for the next 5 years.

10.      Grape Processing Industries Board

a)       A Grape Processing Industries Board will be setup.  This Board will have the representatives from the Grape Processing Industries, Grape Growers, State Government, Government Laboratories and Wine Companies.  This Board will be functioning under the purview of the Department of Horticulture. 

The Objectives of the Board are as follows:
1.                  Inspection and control of Quality of grape crop.
2.                  Formulation of standards for quality of grape varieties suited for wine making, approval of the same and putting them into practice.
3.                  Rendering approval for labels to grape wines.
4.                  Devising and putting into action / implementation of various programmes and practices for the promotion of cultivation of wine grapes, wine industry, research, exhibitions, trade fairs, tour programmes and visits- both within India and abroad, sales of wines and market promotion.

          b)       The constitution of the board will be as follows:


Principal Secretary (Horticulture), Agriculture and Horticulture Department



Principal Secretary, Finance Department or his representative of the rank of Deputy Secretary or above



Principal Secretary, Commerce and Industries Department or his representative of the rank of Deputy Secretary or above



Excise Commissioner



Managing Director, KAPPEC



Two representatives from Wine Manufactures



Two Wine Grape Grower Representatives



Another representative from Wine Production, Processing, Market, Trade, etc.



Managing Director, Karnataka State Beverages Corporation Ltd.,



Director of Horticulture

Member Secretary



c)       The total share capital of the Wine Board will be Rs. 250 million ($6 million) which will be sourced as follows:

                   a.       Horticulture Department       -        Rs. 100 million
                   b.       KAPPEC                            -        Rs.   80 million
                   c.       Karnataka Breweries Corporation     Rs.   70 million

11)     During the current year 2006-07, Rs. 50 million required for the Wine Board, are ordered to be provided from the Horticulture Department's Scheme Processing in Horticulture.

12)     During the next year, i.e., 2007-08, the Finance Department will make a budget provision of Rs. 50 million to Horticulture Department, Rs. 80 million to KAPPEC, and Rs. 70 million to Karnataka Breweries Corporation.

13)     Establishment of Wine Parks

To facilitate wine production and the related activities, Wine Parks having the common infrastructural facilities will be established, one in Nandi Valley and the other in Krishna Valley.  These will be established with Public – Private partnership.  The Commerce and Industries Department will provide the required land acquisition support to such parks, through the Karnataka Industries Area Development Board (KIADB).  The Horticulture Department will work out the other necessary organizational / implementation details.

14)     The implementation of the Wine Policy and the other related activities will be undertaken by the Department of Horticulture.

The implementation of this wine policy is to be done by the Excise Department of  Karnataka.


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