Tea Board may modify past order on blending, change to help tea firms, TCPL

Existing notification bars blending imported tea with GI-tagged Indian varieties; Sources said commerce ministry left it to the Board to take a reasoned call on modification

The Tea Board India is likely to modify a notification that prohibited blending any imported tea with Indian varieties that are tagged with Geographical Indications (GI) and tripped domestic procurement of Darjeeling tea by its largest buyer, Tata Consumer Products Ltd (TCPL).

Tea Board sources said that the Union commerce ministry left it to the Board to take a reasoned decision on the question of modification after consultation with stakeholders.

Following this, a meeting with producers and major customers including TCPL and Hindustan Unilever was held last Friday under the aegis of the Board. “The overwhelming view of the two parts of the industry – the producers and the customers – was that there needs to be a modification,” sources in the Tea Board told Business Standard.

“The notification will be modified without compromising the Darjeeling GI while allowing major buyers to keep purchasing the teas and keep auction prices firm,” sources added.

The modification is expected shortly, but it is not clear whether it would be just for Darjeeling tea or include other GI-tagged teas as well.

The Tea Board, in November 2021, came out with notifications and circular to restrict distribution of inferior imported teas. In the backdrop was cheap imports from Nepal, with properties similar to Darjeeling, that had become a spot of bother for the industry.

One of the directives called for proper labelling with the source of origin for imported tea, irrespective of whether the imported tea has been bought directly by the seller or through an intermediary.

Also, under powers of the Tea (Marketing Control) Order, 2003, registered buyers were prohibited from blending any imported tea with GI-tagged teas — Darjeeling, Kangra, Assam (orthodox) and Nilgiri (orthodox). That impacted TCPL’s Darjeeling tea buy and the industry, in turn.

Tata Tea Gold, it may be mentioned, was mixing Nepal tea procured in India, with Darjeeling for one of its blends, prior to the notification. But following the restriction, the company’s buying this year has been minimal.

Tata Consumer declined to comment on the modification in notification that is in the works.

But in August, in response to queries from this newspaper on the issue of notification and the impact on Darjeeling tea, it had said that Tata Consumer Products had made numerous representations to the Tea Board and Commerce Ministry on the said notification, which included directives on not allowing any Indian GI tea to be blended with other origins even if not claiming the GI mark, which was not in the interest of any stakeholder.

It had said that TCPL was an important participant in the Darjeeling market and would want to continue its role as the leading buyer.

For the Darjeeling tea industry that faces myriad challenges – from lower demand in the export market to high cost, low yield and threat from Nepal tea – the loss of a major domestic buyer was telling.

The average price for Darjeeling from Sale 14 to Sale 41 (April to October) was at 379.14 a kg in 2022 compared to Rs 453.20 in 2021 and Rs 408.23 in 2020. And with higher costs most estates in Darjeeling were pushed into losses.

Anshuman Kanoria, chairman, Indian Tea Exporters Association, said, “We have been pushing for an amendment to the notification

for long. We understand from the deliberations on Friday that the government has decided to make changes to the notification and we welcome it.”

“I believe that domestic packet tea companies like Tata Consumer have a big role to play in the survival of Darjeeling tea and we hope that the company will resume its support to the industry,” Kanoria added.

He also said that the larger issue of threat from Nepal teas remains and needs to be addressed with policy measures and financial assistance to ensure gardens remain functioning tea estates, instead of land banks.