Tea Board of India set for overhaul as exports falter
The 70-year-old Tea Act is heading for an amendment to overhaul the Tea Board of India amid falling tea exports compounded by the Ukraine crisis, senior government officials say.
The amendment to the 1953 law will come at a time when the domestic tea industry faces further challenges from the Russian-Ukrainian conflict, with Moscow being India’s second largest tea market. The Amendment Bill proposes to make changes to the operation of the tea board, so that it can act more as a facilitator than a regulator.
“Several outdated provisions will also be removed from the Tea Act 1953. The proposed bills will promote ease of doing business and increase India’s footprint in the global market,” a senior government official said. .
India’s Department of Commerce is currently consulting with major tea exporters, labor unions, smallholder associations and auctioneers, with the deadline for submitting comments extended by a month to April 9.
Tea exports are expected to decline further as Russia, one of the biggest importers of Indian tea, faces sanctions from Western countries, raising concerns among Indian tea exporters that the country is not in able to pay for the tea. The value of tea exports increased from $828 million in 2012-13 to $785 million in 2017-18 to $700 million in 2020-21. During the period April 2021 to January 2022, outbound shipments of tea from India decreased by 2.21% to $628.55 million compared to $642.74 million for India. corresponding period of last year.
Trade and Industry Minister Piyush Goyal told the Lok Sabha on Wednesday that tea exports, among other products such as pharmaceuticals, telecommunications instruments and marine, could be affected due to the conflict in course between Russia and Ukraine.
Experts said tea exports were already suffering from quality issues and competition from Kenya and Sri Lanka. Tea exports to Russia were declining even before the Russian-Ukrainian conflict, falling to $88.9 million in 2020-21 from $120 million in 2017-18.
Tea Board India’s outgoing vice president, KN Raghavan, said Mint’s Indian tea did not meet the quality demanded in the international market. All new production is for the domestic market. He said the industry is highly regulated and it is important to open it up. He added that tea workers in West Bengal earn as little as ₹200 a day while those in Kerala earn double that.
Queries emailed to the Commerce Department spokesperson on Thursday went unanswered as of press time.
“The main objective of the bill is to have the council act as a facilitator rather than a regulator of the sector, with greater emphasis on market development and branding, quality and testing, research value addition, export-oriented production,” the government said. says the official quoted above.
Experts point to structural issues facing the Indian tea industry.
Biswajit Dhar, Professor at the Center for Economic Studies and Planning, School of Social Sciences, JNU, said: “There are totally unacceptable working conditions there. The tea industry is going through a tough time and India is lagging behind countries like Kenya and Sri Lanka in terms of tea exports. It’s an old problem.” He said productivity needed to improve for the tea revival.
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