Although the tea plantation industry in the country has been raising serious concerns about the import of tea despite India being a net exporter, the outgo on tea imports in calendar 2021 was less than the previous year, reveals our analysis of the latest data available with the Tea Board.

Volume-wise, India imported 25.90 million kg (mkg) in 2021 against 23.79 mkg in 2020, marking an increase of 8.87 per cent.

However, India paid, on an average, ₹145.19 a kg to import this tea against ₹172.06 in 2020.  This payment of ₹26.87 less per kg marked a decline in price of 15.66 per cent.

As only 2.11 mkg more volume was imported at a substantially lower price, the outgo on India’s tea import bill dropped to ₹376.03 crore from ₹409.34 crore in the previous year. This meant a saving of ₹33.31 crore or 8.14 per cent in the import bill.

This essentially happened because of a fall in price in the global market in dollar terms.  The price dropped to $1.96 a kg from $3.32 a kg in 2020. Consequently, the imported tea’s value dropped to $50.87 million from $ 55.21 million.

Nevertheless, the import of 25.90 mkg in 2021 was the highest volume imported in recent many years.

“More importantly, what is the need for import when there is no shortage in the country.  Teas had come in from Kenya, Nepal and Vietnam besides some trading countries which don’t produce tea at all.  Importers contend that these teas are cheap and used for blending with the Indian teas and re-exported but in reality, most such teas get into the Indian market distorting our supply-demand equation and hitting prices adversely”, Tea Board former Member S Ramu told BusinessLine.   

WTO tariffs

The United Planters’ Association of Southern India (UPASI) has pointed out to the Government of India that different tariffs are made applicable for importing tea under WTO and various Free Trade Agreements (FTA).  While WTO imposes 100 per cent import duty on tea, it gets reduced to 45 per cent under ASEAN and 7.5 per cent under Indo-Sri Lanka bilateral agreement, subject to certain conditions, points out UPASI Secretary R Sanjith.

“It is important that no fresh trade commitments impacting plantation sector should be entertained including renewal of existing trade agreements. There is need for proper monitoring mechanism and implementation of rules on country of origin so that no third country takes advantage of the FTA”, he said.

In any case, import cannot be totally banned in the post-WTO era which operates under the ‘Global Village’ concept where free movement of goods is to be encouraged.  Besides tariffs, the injured nations can move the safety valves inside WTO to protect their interests, a Tea Board official said.   

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