India Tea Dealers Want Lower Import Barriers

200px-Flag_of_IndiaTo protect its domestic markets, generate tax revenue and encourage agricultural development at home India has traditionally employed high barriers to imports.

In the past 20 years tariffs on non-agricultural goods have declined to comply with ASEAN treaty but tariffs on agricultural products, including tea, remain high.

“Currently, there is 100% import duty on tea. While the consumption has risen 4-5% annually, the production has increased only marginally,” said Piyush Desai, president, of the Western India Tea Dealers Association (WITDA).  Desai told the Times of India that it will be difficult for India to make up for a shortfall of 21 million kilos compared to last year’s harvest.

The government should permit the import of 40 million kilos of tea from Kenya and Sri Lanka, he said.

India generally produces a surplus but domestic demand is rising and since much of the tea for export is orthodox processed loose leaf. Tea prices have risen 50 to 65 cents (INRs30-40) due to the shortage, he said.