Guwahati: A parliamentary panel has recommended that necessary steps must be taken to increase the competitiveness of Indian Tea exports to counter the stiff competition from other countries.
This was stated in Department Related Parliamentary Standing Committee on Commerce in its report on ‘Comprehensive Strategy to Map Major Products and Countries to Maximize Exports and Minimise Imports’.
With around 21 percent of the global tea production and the highest productivity rate amongst all the tea-producing countries, the country’s tea industry is crucial in terms of earning foreign exchanges as well as providing employment to the workers.
During 2022-23, India was the fourth-largest tea exporter globally. During this period, the country exported 241.05 million kilograms of tea, with a total value reaching USD 817.57 million. The bulk of tea exports from the nation are primarily directed towards UAE, Russia, USA, Iran, United Kingdom, Germany, Iraq, Saudi Arabia, Kazakhstan, and Japan. Together, these countries account for 70 percent of the total volume of tea exports.
Representatives from the Tea Board briefed the Committee on challenges hindering export growth in the tea sector. The presentation highlighted global challenges arising from geopolitical and geo-economic factors, such as the Russia-Ukraine war.
The Committee was informed about a significant decline in tea exports to Iran in recent times. Iran holds strategic importance as a market that historically balanced both export volume and value, particularly for the orthodox tea variety. The tea industry faces intense competition from major exporting countries like Kenya and Sri Lanka, as well as low-priced tea producers like Vietnam, Malawi, Nepal, etc.
Iran is the second largest importer of Indian tea and during 2021-22, around 29.28 percent of the total tea exports have been to Iran.
Iran has ceased tea purchases from India, causing a notable impact. In the first three months, exports to Iran have plummeted by 8.5 million kilograms.
The Committee, therefore, recommends the resolution of export stalemate with Iran at the earliest. The department must ensure that the matter may be taken at the highest level of both Governments and that the bottlenecks are removed on an immediate basis.
Issues related to the availability of laboratories for testing of residues and contamination in export consignments. Testing takes around 40 days per shipment, posing impractical delays, especially for exports to Europe. Parameters
like alkaline or weed contamination require additional testing.
The Committee notes the low demand for Indian Tea due to the present geopolitical factors such as the Russia-Ukraine war and stiff competition from countries such as Kenya, Sri Lanka, Vietnam, Malawi, and Nepal. The Committee believes that diversification of a country’s export destinations can minimize the impact of these factors to a large extent.
The Committee has recommended that the Department conduct a study to identify more such countries where there is a demand for Indian Tea. The Committee further recommends that necessary steps must be taken to increase the competitiveness of Indian Tea exports to counter the stiff competition from other countries.
The Tea Board representatives also emphasized a significant concern regarding Maximum Residue Limits (MRL) when exporting to the European Union. Tea exports from the country contain traces of Nicotine, a naturally occurring pollutant. The MRL
has been revised from 0.6 mg/kg to 0.5 mg/kg until June 30, 2025. Subsequently, it is set to automatically reduce further to 0.4 mg/kg.
This adjustment in MRL is based on the “Exposure assessments” conducted by the European Food Safety Authority (EFSA) in September 2022. Consequently, adhering to the prescribed MRL for “Nicotine” presents challenges for tea exports from
the country.
On the issue of MRL levels adversely affecting the Indian Tea exports to the EU and other countries, the Committee has recommended the Department must take up the issue of rationalization of MRL level with the appropriate authority in the EU and other countries.
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The Committee stresses the need to enhance the availability and infrastructure of laboratories required for testing residue levels in export consignments and also advocates utilizing the capacity available in the private sector in this regard.
The Committee says that small tea growers should be considered on par with farmers for availing benefits under various welfare schemes for the agriculture sector like Pradhan Mantri Fasal Bima Yojana (PMFBY), Pradhan Mantri Krishi Sinchai Yojana (PMKSY), etc. The Committee recommends that the Department of Commerce take up the matter with the concerned Ministry to extend such essential schemes for small tea growers.
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