The Hindu Business Line : Port curbs on Lanka quota tea imports off

New Delhi June 7 The Finance Ministry has done away with port restrictions on imports of quota tea from Sri Lanka at a concessional rate under the Indo-Sri Lanka free trade agreement (FTA).

Under the FTA, up to 15 million kg of tea from Sri Lanka can be imported annually into India at a concessional import duty of 7.5 per cent.

Currently, basic Customs duty on tea is 100 per cent and that on instant tea is 30 per cent.

Prior to the removal of the port restrictions, imports of quota tea and instant tea from Sri Lanka were permitted only through the Calcutta and Cochin ports.

The restrictions were placed under the FTA, which was signed in 1998, to assuage the concerns of the domestic tea growers, especially those from South India, who apprehended large-scale imports from Sri Lanka, affecting their interests.

The FTA has been in operation since the year 2000.

Official sources said that the port restrictions have now been removed following a request from the Sri Lankan Government.

Tariff rate quota

During talks with India, Sri Lanka had submitted that it was not able to use the annual tariff rate quota of 15 million kg due to import conditions such as port restrictions, sources said.

Only 0.11 million kg valued at Rs 1.90 crore were imported during January-December 2005 against 0.16 million valued at Rs 1.86 crore during the corresponding period in 2004.

During January-November 2006, import of tea from Sri Lanka under the FTA amounted to only 0.060 million kg against 0.094 million kg during the corresponding period of 2005.

Tea imports into the country increased 19.25 per cent during April-January 2006-07 to $24.82 million, compared to $20.81 million in the corresponding previous period.

In value terms, tea accounted for 0.02 per cent of the country's total imports during the period.

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