India's tea exports touch highest levels, but rising imports a concern

As India’s tea exports reach their highest levels in years, a sharp rise in imports is raising concerns among producers.

 

In 2024, India took the third spot in tea exports, pipping Sri Lanka after exporting 254.67 million kg (mkg) of tea, up from 231.69 mkg in 2023. Export earnings at Rs 7,111.43 crore were also higher than Rs 6,160.86 crore.

 

Data from the International Tea Committee Bulletin for 2024 shows that India was the third largest exporter after Kenya and China. In 2023, Sri Lanka had held the third spot.

 

However, producers’ bodies Indian Tea Association (ITA) and Tea Association of India (TAI) believe that net exports may not have seen any significant increase.

 

According to industry representatives, imports from Kenya, which faced an oversupply, have seen a massive jump. Tea Board of Kenya data show exports to India saw a 225 per cent increase to 17.13 mkg in 2024.

 

Producers are ruing because tea gardens in North India went for an early closure last year. “We sacrificed about 50 mkg of tea to maintain the demand-supply scenario and help boost prices. But it seems our efforts have gone waste as imports made their way into the market and prices dropped towards the end of the year.”

 

Hemant Bangur, chairman of ITA, said, according to customs declaration, about 45 mkg of tea has been imported into India in 2024; net exports are not significantly higher.

 

Moreover, some of the imported tea may have been used for re-export and passed off as Indian tea, he said. “That will impact the image of Indian tea in the international market in the long-term.” 

 

“We have taken it up with the Tea Board and suggested a strong SOP (standard operating procedure) on imported tea. We should adopt models being followed by other tea producing countries like Sri Lanka,” he said, adding that India has the legal framework, but it needs to be enforced.

 

According to a Tea Board notification, exporters have to clearly mention the origin of tea in packages and invoices while exporting. Any tea exported as Indian tea has to comprise 100 per cent Indian tea. If Indian tea is blended with imported tea, it has to be exported as multi-origin.

 

Sandeep Singhania, president TAI, said some importers have flouted norms and sold imported tea meant for re-export in the domestic market.

 

Imported tea used for re-export is subject to nil duty, he explained. “If sold in the domestic market, it has to pay 100 per cent duty. But some importers sold it in the domestic market evading duty, causing loss to the exchequer,” he said.

 

The TAI and ITA have taken up the issues with the Tea Board. “The Tea Board of India is enquiring into the matter,” Saurav Pahari, deputy chairman of Tea Board, said.

 

The Tea Council of India, an advisory body set up by the Tea Board of India to monitor import and export of tea, has been reactivated.

 

Singhania said that the industry is a part of the Tea Council of India. “It has been re-established and we are going to study how imported tea has been used,” he said.

 

Some of the industry sources also pointed out that the domestic producers have not been able to take advantage of the demand for Indian tea in the international market.

 

Meanwhile the Tea Board is looking to explore new markets. “We are trying to tap Australia and some European nations,” Pahari said.

 

“The Tea Board has been aggressively following up on opportunities. We have held extensive video conferences with trade associations of different nations and also asked our regular buyers not to let go of our hand. Hopefully, we have been able to project Indian tea as clean and safe tea,” he added.

 

Anshuman Kanoria, chairman of Indian Tea Exporters Association (ITEA), said the Indian merchant tea exporters have taken risks to increase exports to large sensitive markets in West Asia, chiefly Iraq, while maintaining robust exports to Russia despite the war.

 

However, a lot more needs to be done to ensure better compliance of Indian teas to national laws and global quality norms to capture larger market share in the western and eastern markets, he added.