Rs 47 bn revival package for Indian tea industry
The bulk of the funds would be utilised to upgrade facilities and replant old plantations to rejuvenate the gardens.india Updated: May 20, 2006 18:45 IST
The Indian government on Saturday announced a Rs 47 billion ($1.03 billion) package to revive its tea industry that has been hit by falling prices and a slump in exports.
"The bulk of the funds would be utilised to upgrade facilities and replant old plantations to rejuvenate the gardens to produce quality teas," Minister of State for Commerce Jairam Ramesh told reporters here.
At least 60 per cent of the package has been earmarked for Assam that accounts for about 55 per cent of the country's total tea production. India produced a record high of 928 million kg of tea last year compared to 820 million kg in 2004.
India is the world's largest tea producer followed by China.
"Unless the aging plantations are rejuvenated, Indian tea would fail to be competitive in the world market," the minister said.
"A total of 1,70,000 hectares of land under tea plantation across India would be covered under the re-plantation scheme."
India's $1.5 billion tea industry was facing a crisis with prices dropping at weekly auctions since 1998 and exports plummeting as well. A kilogram of good quality Assam tea sold at Rs 70 in the auctions last week compared to Rs 90 prior to 1998, when the industry's slide began.
The slump in prices and exports has largely been attributed to cheap and inferior quality of tea produced by many new tea-growing countries, thereby pushing premium quality Indian teas to face stiffer competition in the global market.
India exported 180 million kg tea last year.
The Indian Tea Board, the apex administrative body, now plans to open offices abroad to promote the beverage.
"We are now going all out to tap the tea market in countries like Pakistan, Egypt, and Iran, besides trying to increase the volume of exports to existing markets like Britain," Ramesh said.
"We also are aggressively trying to boost domestic consumption of tea, besides value addition like making organic and green teas to woo more people into drinking the beverage," the minister added.