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Our Bureau

Proposal made to stop illegal trade

Kolkata , April 17

The Indian and Pakistani tea industries are jointly urging Islamabad to remove all duties on import of Indian tea. The matter has already been discussed at a secretary-level meeting held last month. Representatives from the Commerce Ministries of both countries held talks on the subject while discussing the introduction of SAFTA (South Asian Free Trade Agreement).

This was announced by Mr Basudeb Banerjee, Chairman, Tea Board, at a press conference along with representatives of the Indian Tea Association and the Pakistan Tea Association (PTA) on Monday.

A 14-member delegation from Pakistan will visit auction houses, broking firms and gardens both in North and South India.

While Indian teas are subjected to a 10 per cent import duty, imports from three of its competitors Sri Lanka, Nepal and Bangladesh enjoy zero duty. Pakistan imports 133 million kg of CTC tea each year and 85 per cent of it comes from Kenya.

In 2005, Indian tea exporters succeeded in registering the highest ever exports to Pakistan with a volume of 9.3 million kg. Out of it, 95 per cent was supplied by south Indian producers.

Mr Md Altaf, Chairman of the Pakistan Tea Association, said that due to high import duty, approximately 40 million kg of tea was smuggled into Pakistan as Afghan transit trade. As a result, legal trade is affected.

Kenyan exporters too pay a 10 per cent duty. Mr Altaf said the Pakistan Tea Association had urged the Pakistani Government to remove the duties on all exporting countries as it would stop illegal trade.

Despite the duties, North Indian tea is costlier than Kenyan tea. Last year, the average price of Assam tea was $2 per kg (c&f Karachi) against $1.71 of Kenyan tea. This year, due to the drought, the average price of Kenyan tea has jumped to $2.1 per kg.

The Indian Tea Association has suggested preparation of an India blend variety of tea to meet the requirements of the Pakistani tea drinkers.

Though the details of the project are yet to be finalised, Mr Aditya Khaitan, Vice-Chairman of the Indian Tea Association, said the proposal had been placed on a "fast-track" and it would be developed by the leading tea packeteers and merchant exporters.

The Tea Board Chairman assured the industry that the Union Government would lend all support for the development of the India Blend tea variety.

The Indian Tea Association has requested the Indian Government to initiate a dialogue with its Pakistani counterpart to create a direct rail link between Guwahati and Karachi. It would help the North Indian tea producers to reduce their transportation cost.

The Indian Tea Association officials said that if this rail link was established, it would help them export more to Pakistan.

"In any case, the present export volumes are quite high to justify setting up this rail link," the official said.

After meeting a wide cross-section of the North Indian tea industry, the Pakistani delegation will move to South India and meet the representative of the United Planters Association of India.

More Stories on : Tea | Exports & Imports | Excise and Customs | Economic Offences

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