Rising production cost, declining prices cited
The United Planters’ Association of Southern India (UPASI) has appealed to the Union government to retain import duty on tea at 100%.
The current import duty on tea is 100 %. However, under the ASEAN agreement, import tariff for tea from the ASEAN countries is 45%, said AL. RM. Nagappan, president of the Association, in a statement.
Further, under the Indo-Sri Lankan bilateral agreement, 15 million kg of tea can be imported at 7.5% basic import duty. Import of tea under the Indo-Nepal treaty is duty free.
According to a NITI Aayog study on trade agreements, India’s tea imports under the free trade agreements with partners is more than the exports.
Indian tea production till June this year was lower by 8.9 %, mainly due to initial lockdown measures. The production will be made up in the coming months of the year. India exports almost 20% of its production. However, with the COVID-19 pandemic, exports from India between January and May had dropped down by 26.98 million kg. This quantity is also available in the domestic market.
There has been a slight increase in prices since mid June. However, this does not substantiate the demand for duty reduction.
“The tea production segment for the past many years now has been witnessing either stagnant or declining prices on the one side and the increasing cost of production due to high input wage cost on the other. Any changes in the duty structure will have a telling effect on this sector,” he said.
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