Tea Industry of India: The Cup that Cheers has Tears

Asopa V N

No WP2007-07-02, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: Indian tea has virtually lost all global markets because it continues to be traded as a commodity. The much talked about value addition is limited and rather late. Only the markets that have consumers with shallow pockets buy tea as a commodity and that share is fast depleting. The industry needs to be competitive in production, marketing, logistics and product forms. India, despite being a large producer of tea, lacks properly organized production systems in which small tea producers find a respectable place. The industry must have access to capital at globally competitive rates. The subsidies in any form are undesirable. The Indian tea industry must face the market realities, redefine its business strategies and reposition its products. The first step in that direction is a complete restructuring of the tea industry, redefining the roles of various agencies like the Tea Board and Producers’ organizations, and developing a healthy partnership with the labour. There are the problems of market access and discriminatory treatments through non-tariff trade barriers such as maximum residual limits (MRL) and social clause.

Date: 2007-07-02
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