India's tea producers urged to improve quality, move up the value chain

The Indian tea industry needs to improve quality and claw back its position in exports, additional secretary with the commerce ministry, Amardeep Singh Bhatia, said on Friday.

Addressing the annual general meeting of the Indian Tea Association, Bhatia said that India's share in world exports has declined. "Our competitors from Kenya, Sri Lanka have increased their share in the global markets during the period."

"We need to claw back our position in exports and try to regain some of our lost markets as well as diversify our markets," he added.

Bhatia also noted that India's share in global tea production had also decreased steadily from the 1950s. "Now, China has increased its production and become number one by a wide margin; Kenya has also emerged as a large producer and Sri Lanka has consolidated its position," he said.

Bhatia urged the producers to improve the quality and also move up the value chain in exports. Bulk tea accounted for about 86 per cent of exports.

Tea Board deputy chairman, Saurav Pahari, also urged producers to focus on brand building and move up the value chain. He said it was 'high time' that the established tea industry engaged with start-ups in a more constructive fashion.

"They have new, fresh, and out-of-the-box ideas which the traditional tea industry can profit by. And start-ups can profit from the experience that the traditional industry brings to the business," he said.

On value addition, C K Dhanuka, chairman of Dhunseri Tea & Industries, asked how one can go for value addition. He said that plantation and value addition cannot go together.

The top destinations for Indian tea, it may be mentioned, are Russia, the UAE, and Iran, accounting for about 46 per cent of total exports.

Bhatia said, in addition to ensuring quality and timely supply, there was a need to diversify and identify new potential markets and then effectively target them.

Nayantara Palchoudhuri, chairperson of the Indian Tea Association, said that Indian tea exports in 2022 closed at 231 million kilograms, the gains were mainly in the CIS and UAE markets. "The optimism to touch 300 million kilograms in the next 3-4 years remains."

However, she mentioned that Indian exports were somewhat restricted by lower off-take from Iran due to payment-related issues and other factors, competitive pressures from Kenya, Sri Lanka, Indonesia, and Vietnam, all having lower costs of production.

Palchoudhuri also said that the Indian Tea Association had been proactive on the Iran export issue given the importance of that market for Indian teas. "Interactions at the Embassy of Iran and MEA were initiated to break the deadlock. Meanwhile, the Indian Tea Association has also requested the Tea Board to mount and lead a trade delegation to Iran with a hope for positive results."