South India tea planters’ body opposes move for duty free imports of tea

By: |
August 12, 2020 3:30 AM

As the out of home consumption [hotels, restaurants and catering or HOReCa segment] is also affected, the decline in production is no way significant from the consumption point of view.

The press statement was issued against reports of tea packeteers seeking duty free imports in the context of marginal increase in tea prices due to lower production.The press statement was issued against reports of tea packeteers seeking duty free imports in the context of marginal increase in tea prices due to lower production.

Apex tea planters’ body in South India on Tuesday sternly objected to any move that might tinker with the import duty structure, cautioning about its counter-productive impact on the tea growing sector. United Planters’ Association of Southern India (Upasi) president AL RM Nagappan, in a press statement, said tea was an important agro-industry that employed 2.12 lakh growers and 11.65 lakh workers, of which more than 70% were women.

Hence, it is very important for the inclusive growth model pursued by the government, he added.

The press statement was issued against reports of tea packeteers seeking duty free imports in the context of marginal increase in tea prices due to lower production.

Nagappan elaborated that the Indian tea production till June was lower mainly due to the initial lockdown measures, introduced to control the spread of Covid-19. This has led to some increase in the prices since mid- June, which was very much needed for the sustenance of this agro- industry. The decline in the production till June was just 8.9% of the total tea production in the country — needless to mention that this could be easily recouped in the second half of the calendar year.

India being a surplus tea producing nation exports around 18-20% of its yield. However, due to the pandemic, the exports are down by 26.98 million kg in the January-May period, and this quantity is available in the domestic market.

As the out of home consumption [hotels, restaurants and catering or HOReCa segment] is also affected, the decline in production is no way significant from the consumption point of view.

Upasi reported that the price rise in the last few months did not substantiate the duty reduction argument, as the price increase for the period from January to June in South India was lower by 9.4% compared to last year. The demand for duty reduction appeared to be a ploy to jolt the present market sentiments, the association observed. From the consumer perspective, the increase in price per cup would be very marginal and would not impact in any way, as only 2gm is required to make a good cup of tea.

Tea continues to be the cheapest beverage in the world. It may be noted that any fall in tea prices is usually fully absorbed by the producing segment. Any changes in the duty structure will have a telling effect on the sector, which caters to a large segment of population residing in the remote areas, Nagappan added.

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