India-EU FTA boosts tea export prospects but EU regulations remain a challenge: TAI

Guwahati, Jan 29: Tea Association of India on Wednesday said that while the India-EU Free Trade Agreement (FTA) is expected to enhance India’s competitiveness in global markets across key sectors such as agriculture, processed foods and tea, EU regulations on Maximum Residue Limits (MRLs), food safety, traceability, packaging, and labelling continue to pose challenges.

The FTA is aimed at deepening bilateral trade and investment by reducing tariffs, addressing non-tariff barriers, and enhancing regulatory cooperation, paving the way for stronger economic engagement between India and the EU.

With a combined market valued at over Rs 2,091.6 lakh crore (USD 24 trillion), the agreement unlocks significant opportunities for the 2 billion people of India and the EU.

It provides market access for over 99 per cent of India’s exports by trade value, while safeguarding sensitive sectors and supporting India’s developmental priorities.

“While duty rates on black tea and most green tea categories were already nil, the latest FTA is expected to eliminate duties on green tea imports of less than 3 kg, further strengthening India’s export potential. The industry looks forward to provisions in the FTA ensuring regulatory transparency, science-based standards, and timely consultations before the introduction of new measures,” TAI president Shailja Mehta said.

Under the FTA, goods exported to the EU must undergo adequate processing or manufacturing to obtain originating status and preferential access.

Mehta said that for the Indian tea industry, the agreement holds significant promise in expanding EU market access and enhancing competitiveness, provided complementary domestic support is in place, but “to fully leverage its benefits, exporters will require support for certification, testing, traceability systems, and capacity building, particularly for small and medium enterprises.”

“Emerging EU regulations on sustainability, environmental compliance, and human rights due diligence may increase compliance costs, making domestic support even more critical. Early stakeholder consultations and alignment of domestic schemes with FTA commitments will be essential to ensure that Indian exporters, including tea producers, are well-prepared to benefit from the India-EU FTA,” she added.

India exports approximately 19-21 million kilograms of tea annually to EU countries. Germany and Poland together account for a substantial share of India’s tea exports to the EU, underscoring their importance as key entry and redistribution hubs within the European market.