End duty-free tea imports: Tea Association of India

The steps suggested include bailing the Indian tea industry out of “depression” by imposing 100% duty on bulk imports. File
| Photo Credit: The Hindu

GUWAHATI

An association of tea planters and traders has sought stringent steps to ensure cheaper duty-free teas from African, Asian and South American countries are not imported by a section of traders, to be re-exported, at the cost of the image of the beverage produced in India.

The steps suggested include bailing the Indian tea industry out of “depression” by imposing 100% duty on bulk imports for re-export; taking penal action against traders who rebranded cheap, low-quality imported teas as Indian tea; and empowering the Tea Board of India with greater financial and legislative powers to root out the “frauds”.

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The suggestions follow reports that tea imports from several countries, including Argentina, Bangladesh, China, Kenya, Malawi, Tanzania, Nepal, Iran, Sri Lanka, and the United Arab Emirates, jumped by up to 288% during January-November 2024 when compared with the same period in 2023.

While the imports of higher-grade teas from China, Sri Lanka, and Malaysia commanded $11.72 per kg, $5.65 per kg, and $4.13 per kg, respectively, the cheaper teas from elsewhere cost an average of $1.5. The average price of tea for mass consumption in India is $2.5 per kg.

“The Tea (Distribution & Export) Control Order of 2005 mandates that any tea exported from India after blending with imported teas must be branded as multi-origin tea with the origins specified. The laws also require exporting the imported tea with at least 50% value addition from the date of import,” Sandeep Singhania, president of the Tea Association of India (TEA), said.

He said unscrupulous importers flouted a Tea Board directive making it mandatory to obtain a clearance certificate, and declare import and export details on its Tea Council portal. This had resulted in a tenfold mismatch between the import figures released by the Tea Board and the export figures released by the countries of origin.

According to the TAI, the Customs and Directorate General of Foreign Trade authorities should release the tea import figures on time as they have the actual data.

Misleading tag

The association said the bulk of imported duty-free tea is being re-exported as “Indian tea” in violation of the law.

“Most imported teas are of cheap quality originating from Iran, Vietnam and Africa. Rebranding them with the Indian tag has sullied the image of our teas, undermining the prices of teas grown in India, and affecting the sustainability and wage-paying ability of the industry,” Mr. Singhania said.

He said that a sizeable portion of these cheap imported teas found their way into the Indian domestic market and were sold as if they were produced in India, slashing the prices of Indian teas at home.

The TAI said all importers should be asked to furnish their GST (Goods and Services Tax) returns, proof of declaration of their tea imports on the Tea Council portal, shipping bills, and documents pertaining to the re-export of such imported teas for the previous three years.

“The government has various financial and legal penalties available for such violations which must be enforced to stop the malpractice,” the TAI said, advocating 100% duty on teas imported primarily for re-export; penalty levied on violators of laws regulating imports and exports; and stronger muscle for the Tea Board to book fraudulent tea importers.

The TAI also asked the government to activate and empower the dormant North Indian Tea Council to help the Tea Board monitor the quality of imports and exports of teas, and remove the blot on Indian tea.