"In response to a proposal put forward by tea industry and recommended by Tea Board, we are going to introduce an export package for a very short period offering an incentive of Rs 2.50 to Rs 3.50 per kg for export of orthodox and packaged tea," additional secretary, ministry of commerce, LV Saptarishi on Friday said.
Addressing the members of Tea Association of India (TAI) at its 38th Annual General Meeting here, Saptarishi said all shipment of orthodox and packaged tea made between January and March this year will qualify for the package.
The ministry has agreed in principle to the proposal of the industry and the announcement will be made by Tea Board next week, he said.
Saptarishi hoped that this package will help bridge the gap in export last year. "It is hoped that we will be able to make up for the losses suffered in export till November, 2001," he said.
Incidentally, India’s tea export between January and November last year had dipped to 164.19 million kgs from 186.46 million kgs in the corresponding period of the year 2000.
"Tea Board has projected that additional export to the extent of 10 million kgs per month would be possible through the package," Saptarishi said.
Referring to recent decision by the Consultative Committee of Planters Association (CCPA) to stop plucking in North India gardens to reduce production, Saptarishi said, there was global oversupply in almost all commodities, but production reduction was not the answer to it. "To deal with factors attributable to the economic context, there should be equally competent measure. Production reduction is not the answer.
This will not help. If you expect a rise in price by cutting production, it is not going to happen. You (industry) have to work out a different strategy when there is a huge choice before the consumers," he said.
Blaming the marketing strategy of tea industry, the additional secretary said, "it is unfortunate that the industry was unable to find domestic market for only about 850 million kgs of tea, of which roughly 200 million kgs was exported, in a country with one billion population."