To increase the competitiveness of domestic tea exporters, the commerce ministry has started work on evolving a triple-five strategy which seeks to identify five target countries for exports, in a clearly defined steps of five and in a period of five years. For this purpose the government has roped in major private sector players including Tata Tea and Hindustan Unilever.
Explaining the rationale behind the move minister of state for commerce Jyotiraditya Scindia told FE in an interview that since a chunk of the tea currently produced in India get consumed domestically, the government is weighing several options to reverse the trend including the introduction of a new scheme. “We have started work on developing a triple-five strategy paper for increasing our tea exports. The paper should be completed by the end of May this year,” Scindia said.
The government’s concerns are warranted since India’s tea exports have gradually declined despite being the second largest producer after China. While merchandise overseas shipments grew in double digits in 2010, tea exports declined 2.5% in the same year to 193.3 million kilograms as compared to 198 million kilograms exported in 2009. In fact, this was even below the modest 200 million export target set by the Tea Board in the previous year. The declining tea exports is also a sign of the growing threat posed by other economies such as Sri Lanka, Indonesia, Vietnam and Kenya.
“The potential is huge and it needs a collaborative approach. We don’t want this to be merely a government exercise that is why we are involving various private sector companies as well as the big tea exporters to be a part of the discussions,” Scindia said. He said that the steps would focus on improving the quality of tea produced and increase the total volumes. India currently exports only 18-19% of its overall tea production.
Among the steps that the government is likely to draw up include expanding the tea production by giving special incentives under various schemes and encourage oragnised production of tea.
The government hopes that bringing the private sector players would help address some of the broad issues plauging the industry. Tata Tea, which is a part of Tata Global Beverages, is among the country’s largest tea producers. HUL owns brands such as Brook Bond and Taj Mahal Tea.