Heady concoction

Calcutta, Sept. 1: The Tea Board and members of the Indian Tea Association (ITA) will hold talks with Dubai Metal & Commodities Centre (DMCC) officials to facilitate tea exports to the West Asian and CIS countries.

A 15-member delegation, led by Tea Board chairman N.K. Das and Azim Monem, chairman of the export sub-committee of ITA, is leaving for Dubai, Tehran and Cairo tomorrow to promote Indian tea.

Monem said, “Indian producers would like to sell the tea first and then ship it on an f..b (free on board) basis to Dubai. We do not like to take the chance of setting up a warehouse in Dubai and then sell the tea. The other idea is to set up an e-auction platform in DMCC and carry out trade based on the queries. The proposals will be put forward to DMCC chief David Rutledge.”

Nearly 25 million kg of Indian tea pass through Dubai for different destinations ? mostly West Asian and CIS countries.

Monem said if DMCC allows, it will be easier to sell tea to West Asia (where language and duties are impediments) and CIS countries (where payments and banking system is a problem).

DMCC is a free-zone authority offering market participants of the commodities industry support services and business incentives, including a guaranteed 50-year tax holiday on personal and income taxes.

Initially, the Indian tea industry wanted to set up an auction centre in Dubai but the idea was later shelved.

The delegation will also visit Tehran. “The tea market of Iran opened up last year for private players. It is an important market for India, which is focusing on orthodox tea production. Iran buys orthodox quality tea,” ITA joint secretary Sujit Patra said.

The import duty on tea in Iran is 30 per cent now and efforts are on to bring it down to 20 per cent. Iran consumes nearly 100 million kg of tea annually.

The delegation will also meet government officials and buyers in Cairo. Even though Kenyan tea rules the Egyptian market but the Indian variety is quite popular there.

India could hardly export tea to Egypt during the last five years as the import duty was as high as 30 per cent. Egypt has reduced the import duty on Indian tea to 5 per cent. The country consumes nearly 70 million kg of tea.

“We have to face competition from the Kenyan tea in Egypt. The import duty on Kenyan tea is nil,” added Monem.