Calcutta, May 28: With both India and Pakistan taking steps to improve relations, the Indian tea industry has decided to send a delegation to Pakistan to resume tea trade between the two countries.
Bharat Bajoria, chairman of the Indian Tea Association (ITA), told The Telegraph: “The decision has been taken at a meeting of the ITA held yesterday. We will be sending a delegation to Pakistan, which will be led by Warren Tea’s Gautam Bhalla.”
With uncertainty looming large over tea exports to Iraq, the ITA has also decided to send a delegation to Russia next month.
Pakistan buys around 140 million kgs of tea, which is mainly sourced from African countries. According to official figures, India shipped only 3.12 million kgs to Pakistan in 2002 and the consignment fetched a price of Rs 59.94 per kg. However, Indian tea finds its way to Pakistan via Dubai as well, though there are no official estimates on its volume.
The Indian Tea Association had signed a memorandum of understanding with the Pakistan Tea Association to export 7-10 million kgs of Indian tea to Pakistan. But the deal did not materialise following rising tensions between the two countries. With uncertainties plaguing the Iraq market, the Indian tea industry has not been able to set an export target for this fiscal. In 2002, the industry had exported 193 million kgs of tea.
Bajoria, however, pointed out that both Russia and Pakistan consume orthodox tea. Orthodox tea is premium-quality leaf tea, which commands a good price in the export market.
“The orthodox tea production has remained the same in 2001 and 2002. We have been able to produce 89 million kgs of orthodox tea in both the years. We are hoping to raise it by 20 million kgs in the current fiscal. But we need more funds.”
The tea industry has asked the Union commerce ministry to plough back the money being deposited in the development cess fund by the industry to produce orthodox tea.
In the Union budget, finance minister Jaswant Singh had proposed to abolish the excise duty of Re 1 per kg and replace it with a cess of Re 1 per kg to be used to develop tea plantations.
“We have told the ministry that funds should be provided against exports of orthodox tea. But the government is sitting on our proposal. We have resources to produce orthodox tea till August-September. If the scheme is not in place within this time, it will be difficult for us to produce orthodox tea. The industry is disturbed over the issue,” said Bajoria.
“The abolition of excise duty is not helping us. With the excise duty in place, the producers were availing of various facilities. Now, the cess is being collected, but the producers do not enjoy any additional benefits,” he added.