The tea industry in India is in dire straits as, after years of defying cheaper teas imported from Kenya and Sri Lanka, the beverage industry has a new worry — duplicate Darjeeling teas brought in from Nepal.
The Tea Association of India (TAI) has raised the red flag on Nepal-origin teas reportedly sold in the domestic market as the premium Darjeeling teas, thereby “diluting the brand image of Darjeeling tea and adversely impacting prices”.
A concentrated effort by the Tea Board, along with Customs, the Ministry of Commerce and Industry, and the Food Safety and Standards Authority of India (FSSAI), is required to check the damage to the Darjeeling brand, the TAI said in a paper on the “Sustainability of the Tea Industry in India”.
The association said that a revised treaty on trade signed in 2009 allowed the free and unhampered flow of goods between India and Nepal. But that should not be the reason for overlooking certain regulations. The current trade between India and Nepal allows mandatory sanitary and phytosanitary certificates before products are allowed in the country. This should be strictly enforced and a notification may accordingly be issued. “
Teas that are not FSSAI-compliant should not be allowed in and there should be no relaxation in testing parameters for the safety and health of Indian consumers.
The TAI also stated that allowing duty-free imports of low-quality teas, primarily from Kenya and Sri Lanka, was undermining the Modi-led government’s “self-reliance” and “vocal for local” vision.
If that were not damaging enough for domestic tea producers, Tea Board data records show 23.43 million kg of the 60.35 million kg of teas imported in the last three years have been re-exported.
This emphasises the fact that the remaining 36.92 million kg of imported teas have been sold in India in violation of the Food Safety Standard [Packaging & Labelling] Regulations, 2011. It is proposed a “robust rule of origin”, mandatory production of all sanitary and phytosanitary certification for all imports and mandatory checking of each consignment of imported teas according to FSSAI regulations.
Also, TAI said that the “depleted rupee balance” was impacting payments for Indian teas imported by Iran. The Central Bank of Iran has for the past few months stopped releasing any INR [Indian rupee] payment for tea imports from the Vostro Rupee-Rial trading account as the rupee balance is depleted. The situation is adversely affecting Indian tea exports to Iran.
Vostro is an account held by a foreign bank with a domestic bank in the local currency.
“Iran is one of the leading importers of Indian tea. The decline in tea exports to Iran is creating a demand-supply imbalance in the Indian domestic market, leading to an over-supply.
The TAI has urged the Centre to let the Reserve Bank of India (RBI) allow payments in any currency from a third country for shipments to Iran to overcome the present crisis “since rupee payment is not activated or may be closed shortly”.
The RBI may also consider giving permission to the commercial banks concerned to square up the export packing credit availed for export to Iran and closure of respective shipping bills, the paper said.