The Hindu Business Line : `Border, transport issues critical for tea exports to Pak'

Kolkata May 7 Two issues, namely, the opening up the border trade and transportation by the land route, particularly in rail containers, are critical for boosting the exports of north Indian teas to Pakistan, according to Mr Basudeb Banerjee, Chairman of Tea Board.

Price-sensitive

Briefing newspersons on the recent visit of the Indian tea delegation, which he headed, to Pakistan, Mr Banerjee, saod: "Pakistan is a price-sensitive market and the opening up of the border trade and the consequent shipments by the land route will be a great facilitator as the landed cost of the north Indian teas in Pakistan will be substantially reduced". He, however, expressed the hope that the exports of the south Indian teas would receive a boost.

"The shipping protocol between the two countries having been signed, direct sailings between Kochi and Karachi ports would hopefully start shortly," he said.

South Indian teas, accounting for an estimated 12 million kg out of a total Indian exports of 15 mkg to Pakistan, are now sent to via transhipment at Colombo.

During the meeting with the Indian High Commission in Pakistan, as he pointed out, the representatives of tea trade from both the countries raised the issue of facilitating the trade through the land route.

It transpired at the meeting that under SAFTA discussions, the scope of multi-modal transportation was being examined.

The opening up of the rail route for containerised freight traffic could possibly be taken up during the next round of SAFTA composite dialogue, likely to be held in July/August, he said.

Container trains

Right now, there are train services on two routes between India and Pakistan - Atari-Wagah route and Munabao-Khokrapor. While both passenger and freight trains move on the first route, only passenger trains on the second route.

Again on the Atari-Wagah route, no container trains run. If the north India teas are to be transported to Pakistan by land route, then movement of container trains is a must but currently there are no facilities for handling container trains across the border.

"The interest in running container trains is more on the Indian side than on the other side presumably because there is hardly any traffic in the reverse direction, i..e on the Wagah-Atari section and also substantial investments will be needed in Pakistan prior to launching container train services," Mr Banerjee said.

However, as he felt, the additional cost of moving empty containers on the Pakistan-India direction could be addressed through a suitable subsidy scheme on the lines of the subsidy currently available on the empty movement on Kolkata port-Amingaon inland container depot section.

Import duty

The issue of reduction of import duty on India teas was also on the cards, Mr Monojit Dasgupta, Secretary-General of Indian Tea Association, also a member of the tea delegation, pointed out. Right now Nepal and Bangladesh enjoy duty-free exports to Pakistan under the SAFTA-LDC agreement. Sri Lanka too was negotiating reduced duty with Pakistan under the bilateral FTA. Unless the duty on Indian teas was reduced selectively, there would be no advantage vis-à-vis the Kenyan teas, which also attracted duty at the same rates.

The bulk of Pakistan's tea imports is from Kenya.

Mr Gautam Bhalla of Warren Tea, who also visited Pakistan with the delegation, drew attention to one disadvantage the North Indian teas faced vis-à-vis South Indian or the Kenyan teas. It was seasonality of the North Indian teas, which were available only for about six months a year, against round-the-year availability of the other two varieties. The problem, however, could be tackled by staggering the shipments throughout the year, he said.

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