Commerce and Industry Minister Piyush Goyal is scheduled to meet stakeholders of Assam and Darjeeling tea industry on Saturday in Kolkata to discuss the challenges being faced by the industry players. Significantly, the Indian tea industry has been facing the double whammy of sluggish domestic consumption and low export demand, which is dampening the overall price realisation.
Darjeeling tea, famous for its unique taste and aroma, is facing the problems of falling productivity, and lower domestic and export demands. Due to lower demands, auction prices of the premium tea have witnessed a significant decline. Moreover, Darjeeling tea planters are alleging that dumping of cheap duty-free tea from Nepal has been depressing Darjeeling tea prices in the domestic market and causing huge losses to them.
MIP on Nepal tea
The Indian Tea Exporters Association (ITEA) had earlier suggested to Goyal that an MIP be implemented for tea from Nepal to prevent the dumping of cheap duty-free tea. “We are urging the government to impose some rules to prevent dumping of cheap Nepal tea. If the government cannot impose MIP or something else, then it should provide some cash support to the Darjeeling tea industry because planters are making huge losses,” an industry insider told businessline.
Notably, for 2023, India’s tea production is likely to remain the same as that of 2022 with minor variations, according to industry experts. In 2022, the country’s total tea output stood at 1,366 million kg. The industry is, however, deeply concerned about poor domestic consumption growth and low export demand.
The country’s tea export is likely to be down last year compared to the previous year, mainly due to a significant decline in exports to Iran which is purchasing a lesser amount of the brew. Exports to Russia and the UAE also witnessed a decline. India’s tea exports stood at 231.08 million kg in the 2022 calendar year. “India’s export policy should encompass clear target and subsidies to incentivise it. The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme does not give tea enough incentives. Our exports are not increasing,” another industry insider said, requesting not be named.
“For enhancing domestic consumption, we have to have generic promotions for tea. It should be a collective effort of both the industry and the government,” he added.