The 25-member European Union (EU) wants India to reduce high import duties on wines and open its markets to European exports urgently, as it is facing a rising glut at home and is keen to protect its own local producers from new entrants like Australia and the US.

Over the past five years, the EU''s average wine production has been around 178 million hectolitres valued at €16.1 billion. In 2005-06 it was about 165 million hectolitres or about 65 per cent of the global production.

However, declining consumption in the European market and sharp surge in imports from the US, Australia, South Africa and Chile has led to a glut in the EU. Currently, the EU spends an estimated €500 million every year to store, dispose off or distil surplus wine into alcohol.

"We in Europe are producing too much wine for which there is no market... Consumption is down, and exports from the new world are making huge inroads into the market. We spend far too much money disposing off surpluses instead of building on quality and competitiveness," the EU agriculture commissioner Mariann Fischer Boel recently commented.

To manage its rising unsold wine stocks, the European Commission will adopt legal measures aimed at improving market balance, boosting quality and promoting sales of European wines on 4 July.

The reforms are aimed at managing production by limiting planting rights and supporting structural improvement. The reforms would seek to adapt quality and quantity to consumer demand.