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Tea - easily identifiable with India, immediately brings to mind the lush tea gardens of Darjeeling, Assam and the Nilgiris. The tea plant that was first discovered growing indigenously in Assam in 1815 by a traveller is today a well established industry in the country, producing more than 850 million kgs of tea annually. The tea industry is one of the oldest organized industries in India with a large network of tea producers, retailers, distributors, auctioneers, exporters and packers and employs one of the largest workforces in the country.
It is a well-known fact that next to water, tea is the most widely consumed non-alcoholic beverage world over. It is grown in more than 32 countries among which India is the largest producer. Located in backward, rural and hilly areas, the tea plantations supplement the economic life of these regions through employment generation and social welfare and provide a higher standard of living at the grassroots level. The industry provides direct employment to more than a million workers of which a sizeable number are women. More than two million persons derive their livelihood from ancillary activities associated with production, value addition and marketing of tea. The tea trade is a major contributor to the country’s economy. Substantial foreign exchange earnings with negligible import content, contribution to the State and Central exchequers, preserving a pollution free biosphere and soil conservation. are some of the important features of this industry.
Production and Export
With a history of tea making and tea drinking, it is not surprising that world over, Indian teas are appreciated for their unique flavour and aroma. India produces three specialty teas - Darjeeling, Assam and Nilgiris which are exported world over. Green and organic teas are also produced in India but in small quantities. Tea is grown in 13 States and Assam, West Bengal, Tamil Nadu and Kerala are the largest producers. Though the major part of the tea production comes from big estate gardens, the contribution of the small grower segment has shown an increase in recent years with many small farmers in Assam, North Bengal and Bihar switching over to its production.
In 1998, the country produced the highest ever 870 million kgs of tea. Of this, 758 million kgs was Crushed-Torn-Curl (CTC), 104 million kgs was Orthodox (leaf tea) and 8 million kgs was accounted for by other types, which included green, organic and instant teas. Exports at 210 million kgs in 1998, were also the highest ever in the past decade. Despite being the world’s largest producer, India’s share both in world production and exports has declined over the years. The country today accounts for 27.16 per cent of the global tea production and 13.09 per cent of the world trade. While production of tea during 2004-05 (April-July), estimated at 310 million kgs, has registered a substantial decline of about 29 million kgs as compared to the corresponding period of the previous year, tea exports, estimated at 56.06 million kgs during 2004-05 (April-July), have shown an increase of 9.79 million kgs over the same period of the previous year.
Almost every tea-drinking nation in the world imports some variety of Indian tea! Due to an existing large domestic market for Indian tea, exports, however, account for less than 20 per cent i.e. domestic production.
Some of the constraints facing the Indian tea industry which directly affect production, productivity and quality, include the old age of bushes with more than 30 per cent of the tea area being above the economic threshold age limit, slower pace of replantation with the rate of replanting being less than 0.5 per cent as against the desired level of 2 per cent and the consistent fall in its auction prices which has adversely affected the investment in the plantations. The consequent decline in productivity along with increasing input costs have led many gardens to become sick or close down. The share of Indian tea in the world market, on the other hand, has suffered in recent years due to the stiff competition from other producing and exporting countries like Sri Lanka, China, Indonesia, Vietnam and Kenya. Some other factors that have adversely affected the export potential of Indian tea include - various tariff and non-tariff measures imposed by some tea importing countries, lower off take by Russia due to change in consumer preferences, lower production of orthodox teas which have a larger demand worldwide, quality problems and the higher cost of production and prices of Indian tea.
Initiatives
The Tea Board of India, a statutory body of the Government has been entrusted with the task of the development of the tea industry. It has taken several initiatives to support the tea industry and overcome the challenges it is facing today. During the 10th Plan period, the Board is implementing a number of developmental schemes for enhancing the productivity, quality and marketability of the teas produced in the country. These include financial and technical assistance to various plantation development activities, such as replanting, rejuvenation, and creation of irrigation facilities. Export is also being focused upon with the implementation of a medium term export strategy. The production of quality teas, especially orthodox type of teas is being encouraged. Media campaigns have been launched to increase consumer awareness for Indian teas besides extension of promotional support to Indian exporters in marketing Indian brands in principal export markets. The total 10th Plan outlay for the Tea Board is Rs.350 crore which is being utilized to rejuvenate the tea industry.
Special efforts are also being made to address the problems of the small growers of tea. These include measures like fixation of a price sharing formula between small tea growers and the manufacturers to enable the small growers to get a reasonable share of the price obtained for the made tea, implementation of a price subsidy scheme and carving of a Special Tea Term Loan package. One of the most important initiatives taken by the Government in the small sector has been the quality upgradation programme, which was launched in South India in July 2000 and is continuing successfully so far. The Tea Board has also followed it up by launching a full-fledged scheme for quality upgradation and product diversification, aimed at modernizing the tea factories. The measures taken not only seek to alleviate the income related problems of the small growers, but also recognize the inherent advantages and immense potential of the small grower sector in driving Indian tea exports.
Though in the last few months, there has been a recovery in the prices of tea and exports have also started looking up, it is now evident, that with the emerging trends in the globalised economy, markets can no longer be protected. The Indian tea industry, would have to gear itself up to counter the new forces unleashed by globalization. (PIB Features)
**OSD (Broadcasting), Ministry of I & B, New Delhi.
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