Aug 14, 2020
The Consultative Committee of Plantation Associations (CCPA), the temple body of tea associations in India, has requested Union Commerce Minister Piyush Goyal not to reduce import duty on tea as any action in that direction will disturb the equilibrium of the industry resulting in unfavourable consequences.
CCPA chairman, Vivek Goenka in a letter addressed to Goyal said that any such move will lead to erosion of domestic prices and subsequently affect the economic viability of the tea gardens and livelihood of lakhs of people.
According to CCPA, reduction in import duty, now 100 per cent, will pave the way for cheap tea to flood the market which will have disastrous effect on local prices.
The letter also mentioned that Indian tea production over the last decade has increased rapidly primarily due to the emergence of small tea growers who contribute nearly 50 per cent of overall production to the market.
The letter stated that while annual production of the beverage is around 1400 million kg, 250 million kg are exported and domestic consumption level is nearly 1100 million kg. The ratio of consumption level has not grown with balance of the production.
Tea imports From Nepal into India is governed by a Free Trade Agreement allowing such teas to be imported without payment of import duty, the letter further added.
According to CCPA, Sri Lankan tea which competes with Indian orthodox tea in the international market enjoys a concessional import duty of 7.5 percent up to an import level under a trade agreement.
Tea being imported for re-export are subject to nil import duty in India, CCPA said adding that inspection structure should be strengthened to ensure that the influx of teas through imports conform to the prescribed FSSAI quality norms and compliances.
In this connection, Nepal teas being sold as Darjeeling Tea is depressing prices in the domestic market, it said, adding that reducing import duty on tea and granting easier access to imports will prove harmful to the domestic industry.