Tea growers oppose move to reduce duty

Say imports will hit viability of gardens

Mphasis said it has recently been granted a US patent for its artificial intelligence system for tracking, managing and analysing data from unstructured data sources. "The patented system enables enterprises to draw actionable insights at real-time from enterprise data sources such as e-mails, call centre transcripts, insurance policy documents, broker submissions, bank statements and customer complaints among others," it said.

Amidst reports of traders seeking duty-free import of tea, growers across the country have opposed it and warned the government that any such move will destabilise the sector.

The Consultative Committee of Plantation Associations (CCPA), the apex body of tea associations in India, urged the government not to reduce import duty on tea “as any move in that direction will disturb the equilibrium of the industry”.

“A duty reduction will lead to erosion of domestic prices and subsequently affect the economic viability of the tea gardens and livelihood of lakhs of people,” CCPA chairman Vivek Goenka said in a letter to commerce minister Piyush Goyal.

The United Planters Association of South India (Upasi) too has maintained that it will be counter-productive for the tea growing sector. According to Upasi president A. R. Nagappan, the industry employs 2.12 lakh growers and 11.65 lakh workers, of which more than 70 per cent are women.

The tea growers have made such requests following reports that tea traders and packing companies had asked the government to allow duty-free imports after tea prices touched new highs in the recent auctions.

After eight years of price stagnation, average tea prices in the country’s auctions have risen by 40-60 per cent during the AprilJune period due to strong buyer demand and a huge shortfall.

According to the Indian Tea Association, the country has already registered a 120-140 million kg shortfall in production. Heavy rains and the absence of tea pickers due to the lockdowns had hammered production and sent tea prices spiraling to records.

In contrast, tea prices in Kenya and Vietnam have fallen due to increased production and traders are planning to import from these countries. Tea imports currently attract duty of 100 per cent. However, under the Free Trade Agreement, tea can be imported from Nepal without duty and from Sri

Lanka at a concessional duty of 7.5 per cent.

CCPA says reduction in import duty will see cheap tea flooding the market and it will have disastrous effects on prices. It also wanted tea imported into the country to be checked for the prescribed FSSAI quality norms and compliances.

According to Nagappan, the price increase in the last few auctions does not substantiate the duty reduction argument as the price increase for the period January to June in South India was lower by 9.4 per cent.

Further, India produces tea in surplus and exports around 18-20 per cent of its production. A disruption in the tea industry will also deprive export revenues to the country.