Wagh Bakri's Desai Demands Scrapping of Import Duty on Tea in India

Wagh Bakri Group Chairman and Managing Director Piyush Desai has urged the Centre to abolish or substantially reduce the import duty on Indonesian and other countries' tea to make the beverage available at competitive prices in India and meet the challenge being posed by the increased number of coffee consumers.

At present, Indian tea producers are protected with 100 per cent duty levied on imported tea. It needs to be reduced to ensure smooth supply of premium varieties of tea to compete with good varieties of coffee. He also urged the Centre to allow blending of Indian tea with Kenyan and Sri Lankan varieties.

The global consumption of tea is 3,800 million kg annually. China alone produces 1,700 million kg, followed by India with 1,100 million kg, Kenya (370 million kg), Sri Lanka (325 million kg) and Indonesia (55 million kg). Malawi and Pakistan also produce tea.

In India, tea is mainly produced in 8,500 tea estates in West Bengal and Assam and another 5,500 in Kerala, Karnataka and Tamil Nadu. Most of these tea gardens are big, ranging between 25 and 700 hectares. Together they produce 1,100 million kg of tea, of which 75 per cent (850-900 million kg) comes from big estates, the balance being produced by smaller ones with two to 20 hectares of land.

Due to laws on prevention of deforestation, big garden owners are unable to increase their cultivation. On the other hand, small tea garden owners have the capacity to increase their production at a time when consumption is increasing at 3 to 5 per cent annually.

Desai said M.G.V.K. Bhanu, Chairman, Tea Board of India, has deputed district-wise officers and started a training programme for small tea growers to make them focus on good production practices, including use of fertilisers and pesticides. Unlike big estates, small tea growers are not compelled to provide education and residential facilities to their workers. So they can sell their tea at least 15 to 20 per cent below the price at which big tea gardens sell.

Due to competition, Indian tea exports had dropped from 2,000 million kg in 2000 to 180 million kg in 2012. India needs to increase domestic consumption by promoting indigenous teas blended with the imported ones.

Desai also emphasised the need to resume two-week credit facility for auction buyers who buy tea at seven public auction centres across India. This facility was discontinued five years ago and the buyers were asked to pay in cash.

Consumer prices of tea have doubled since 2008 due to an annual price increase of 15 per cent, he added.