Market trends of tea import

The import scare has bitten tea also, basic duty on this item too is up from 15 per cent to 35 per cent. Sri Lanka will be affected by the change in the short run since tea import is freely allowed only from SAARC countries. The beverage is due for shift to the free list only in April next year.

The Indo Sri Lankan free Trade  Agreement does provide for 50 per cent duty concession on Sri Lanka tea subject to an annual tariff rate quota of 15m kg. The 7.5 per cent confessional duty under the agreement will now rise to 17.5 per cent.

Besides, tea prices have crashed in India. The average Calcutta auction price during March was just 136 cents per kg, a steep 100 per cent from the 225 cents per kg recorded less than 12 months ago. Colombo and Mombasa auction prices are, however, relatively steady and well above Calcutta

Tea imports are not a threat to India now, the duty hikes serve a little purpose. It is time to prepare the plantations for operating in a true global environment

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