Guwahati, Sept 30: A tea producers' body has written to the Centre highlighting that there is an urgent need to curb import of inferior quality tea and consequent manipulation in its place of origin during re-export.
The Tea Association of India (TAI) also stressed the need for checking ingress of such quality of tea into the domestic market. A representation to Union Minister of State for Commerce and Industry Anupriya Patel by TAI vice-president Ajay Jalan here on Wednesday said the foreign trade policy should focus on improving the country's market share in existing markets and products as well as exploring new ones.
The TAI raised the issues relating to the import of tea in its proposals to the Central government for upholding the sustainability of the tea industry, which employs over 11 lakh people directly, with almost half of them being women. It pointed that the import of tea has been increasing in the country at a steady pace over the last five years, going up from 20.97 million kg in 2016 to 23.79 million kg in 2020.
While it has been 4.41 million kg for the January-June period this year, it was 12.16 million kg for the same period in the previous year. The tea producers' body mentioned that the landing cost of average quality tea from countries like Indonesia, Vietnam, Malaysia, and Nepal, is usually cheaper than Indian tea due to the lower cost of production in those countries. In such a scenario, any move to reduce import duty on tea from the present level of 100 per cent would result in an influx of cheap quality tea in the Indian market and would disturb the demand-supply equilibrium in the domestic market leading to depressed prices, losses, erosion in employment levels, the TAI said.
It would also threaten the livelihoods of millions of workers and small tea growers who are dependent on the tea industry. The present import duty rate of 100 per cent on tea needs to subsist, it said. A large quantity of duty-free tea imports declared for re-export comes to India at a very low price from different origins such as Africa, Argentina, and Vietnam, and while some are re-exported as multi-origin tea, many importers re-export these tea as Indian origin, the TAI said.
As much of these imported teas are of low quality, blending such teas with Indian varieties and passing them off as Indian tea lowers the image of our country and jeopardises the sustainability of the industry in India, it added.
Regarding issues specific to tea coming in from Nepal as a trade treaty with this country allows a free and unhampered flow of goods between the two neighbours, the Association said tea from Nepal is reportedly sold in the domestic market as Darjeeling tea, thereby diluting the brand image of Darjeeling tea and adversely impacting prices.
It pitched for a concentrated effort by Tea Board India, along with Customs, Ministry of Commerce & Industry, and Food Safety and Standards Authority of India (FSSAI), including import of Nepal tea which is FSSAI compliant and there should be no relaxation in testing parameters. It also urged for mandatory submission of information of imports, re-exports, and distribution of imported tea within India every month, particularly concerning imports from countries with which India has Preferential Trade Agreements.
The TAI also pointed to violations in re-export of duty-free imported tea and, quoting Tea Board figures, said against 60.35 million kg of tea imported into India in the last three years, only 23.43 million kg were re-exported, which underlines the fact that the rest 36.92 million kg of imported tea have been sold in the country.
Measures suggested by the body for checking this included mandatory submission of all import details of tea to Tea Board, and checking of each consignment of imported tea as per FSSAI regulation.
The TAI further said while the share of Indian tea production remained constant at around 22 per cent and export share between 12 per cent to 13 per cent in the last 10 years in the global market, China has increased its production share from 34 per cent to 45 per cent and export share from 16 per cent to 19 per cent. Kenya too has increased its export share from 24 per cent to 26 per cent during this period.
The Association also said the country's Foreign Trade Policy should focus on improving India's market share in existing markets and products as well as exploring new products and new markets.