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Tea industry must modernize, and adapt to become viable: Piyush Goyal

  • Category
    Economy
  • Published
    17th Nov, 2022

Context

In an address to the Indian Tea Association (ITA), the Union Minister of Commerce and Industry said that small tea growers will have the biggest role to play in shaping the future of the tea sector in India.

About

State of Indian Tea Industry:

Production:

  • India is the second-largest producer of tea globally.
  • The northern part of India is the biggest producer at about 83% of the country's annual tea production in 2021-22 with the majority of the production coming from Assam followed by West Bengal.
    • The Assam valley and Cachar are the two tea-producing regions in Assam.
    • In West Bengal, Dooars, Terai, and Darjeeling are the three major tea producer regions.
  • The southern part of India produces about 17% of the country's total production with the major producing states being Tamil Nadu, Kerala, and Karnataka.
  • India's total tea production for the financial year 2020-21 was 1,283 million kg.

The tea industry in India- Exports:

  • India is among the top 5 tea exporters in the world making about 10% of the total exports.
  • In the year 2021, the total value of tea exports from India was around US$ 687.9 million.
  • Indian Assam, Darjeeling, and Nilgiri tea are considered one of the finest in the world.
    • The majority of the tea exported out of India is black tea which makes up about 96% of the total exports.
    • The types of tea exported through India are Black tea, Regular tea, Green tea, Herbal tea, Masala tea, and Lemon tea.
    • Out of these, black tea, regular tea, and green tea make up approximately 80%, 16%, and 3.5% respectively tea exported from India.
  • India sends tea abroad to more than 25 different nations.
    • Some of the top countries importing tea from India are China, Russia, Iran, the United Arab Emirates, the United States, and the United Kingdom.

Challenges faced by the tea industry

  • Overproduction is currently the biggest issue the Indian tea sector is dealing with.
  • China produces a lot of black tea which is not consumed domestically.Indian tea exports may be at risk as a result of this.
  • Since tea now has a six-digitHarmonized System of Nomenclature (HSN) code, India no longer serves as the place of origin (after some value addition), which poses another danger to Indian export.

Harmonized System of Nomenclature (HSN):

  • It was developed by the World Customs Organization (WCO) and it came into effect from 1988.
  • India has been a member of the WCO (World Customs Organization) since 1971.
  • The common HSN codes apply to Customs and GST, and importers and exporters have been furnishing these codes in import/export documents.
  • Over 200 countries use the system as a basis for their customs tariffs, gathering international trade statistics, making trade policies, and monitoring goods.
  • A huge number of small-scale, unorganized tea farmers are present.
  • Untapped tea tourism has immense potential, but it needs a boost.

Growth of the Indian Tea Industry:

  • The one District and One Product (ODOP) scheme can help spread the glory of Indian Tea.
  • To make the tea sector profitable, viable, and sustainable, the ‘AROMA’ of tea must be enhanced:
    • Assistance: Support small growers to improve quality with sustainability, and increase production to meet domestic and international demand.
    • Re-energize: Create infrastructure to augment exports and focus on high-value markets such as the EU, Canada, South America & Middle East.
    • Organic: Promote organic and GI tea through brand promotion and marketing.
    • Modernization: To enable tea farmers to become self-reliant and strengthen local supply chains.
    • Adaptability: Focus on the importance of a risk-proof ecosystem, that is, the need for sustainable solutions to make tea plantations meet the challenges of climate change.

Initiatives by the Tea Board of India

  • Subsidies for Domestic Exporters: The Tea Board also provides subsidies to domestic exporters to participate in International Fairs and Exhibitions.
  • Tea Development and Promotion Scheme:This scheme was launched in November 2021 by the Tea Board of India for the period of 2021-26.
    • The objective of this scheme is to enhance the productivity and quality of production in India.
  • Chai Sahyog Mobile App: Chai Sahyog app is developed by the Tea Board India for tea stakeholders, which will bring traceability of green leaf, besides circulating advisories and weather forecasts.
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