Increased tea import detrimental to domestic market: UPASI

·3-min read

Coimbatore, July 5 (PTI): The United Planters Association of Southern India (UPASI) on Monday expressed concern over the increased import of tea as the association said it would be detrimental to the tea market in the country.

Tea is an important agro industry that employs 2.12 lakh growers and 11.65 lakh workers, of which more than 70 per cent are women.

Fifty per cent of the production in the country come from the small grower sector, UPASI president Prashant Bhansali said in a statement here.

The plantation commodities, including tea, were exposed to international competition since April 2001, when the quantitative restrictions were lifted as per the commitments under the WTO (World Trade Organisaition.

The signing of the ASEAN Agreement in 2009 had further opened up the Indian tea market to the plantation producing countries like Indonesia and Vietnam. Under the ASEAN pact, import duties were gradually reduced since 2009 for tea and the current import tariff for ASEAN countries, viz. Indonesia and Vietnam is 45 per cent.

Import of tea from Nepal under SAFTA is nil duty.

The imports during 2020 were estimated at 23.40 million kg as against 15.85 million kg in the previous year, an increase of 47.63 per cent, Bhansali said.

During the first quarter of this year [calendar], the import has shown a significant jump of 139.36 per cent and imports of increased quantities are reported from Kenya, Nepal and Vietnam, he said.

The domestic tea sector has been witnessing increasing cost of production due to high input cost and high wage cost and any higher intake of tea through import would have a telling effect on the sector which caters to a large segment of population residing in remote areas, he said.

The Central government should closely monitor import of tea and also implement provisions of Tea [Distribution & Export] Control Order 2005, wherever necessary, he said.

On the other hand, tea exports had taken a hit as evident from the decline in the quantity exported and the value realised.

The export was lower by 42,430 tonnes in 2020 and declining trend continued during the first four months of 2021.

Though, there was some recovery expected on the export front, the shortage of containers, especially food grade containers and increased freight charges, had turned out to be an obstacle for plantation exports, including tea from India.

This has resulted in an increase in the transaction time and cost leading to a considerable delay in completing the export formalities.

This could damage the green shoots of recovery seen on the export front, he said.

In the midst of these disadvantages, the non-payment of Merchandise Exports from India Scheme (MEIS) from April 1, 2020 and dis-continuation of the scheme itself from December 31, 2020 without any new incentive scheme in place had added further difficulty to the existing distressed situation, he said.

Though, the government had announced that RoDTEP (Remission of Duties Taxes on Export Products) would be implemented with effect from January 1 this year, the rates for the plantation commodities are yet to be finalised.

The exporters' factor in export benefits/rates while quoting the prices to the overseas buyers.

Any mid-way changes to the export incentive scheme without even finalising the incentive rates under the new scheme would put the exporters to great difficulty.

The lower budgetary allocation for the export incentive scheme in the Union Budget 2021-22 is also a matter of concern, he said.

The export of plantation commodities needs to be supported as the country is at a competitive dis-advantage compared to other export origins due to the infrastructural in- efficiencies, high wages and social costs, Bhansali said.

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