Context
The financial stress in the tea plantation Industry is affecting the investors and the plantation workers who are dependent on this industry for generations.
About
- India is the 2nd biggest tea producer and biggest black tea manufacturer.
- Indian teas are exported to numerous destinations like Iran, Iraq, Syria, Saudi Arabia, Russia and so forth. It is the 4th largest tea exporter in the World.
- The Indian tea Industry is using 1.16 million people directly and an identical range of people are related to it not directly.
- Assam grows about 55% of the teas produced in India. India’s tea production has multiplied by 39% in 2022 from 2008.
Challenges confronted by Indian Tea Industry
- Increased enter price: The tea expenses expanded at a compound annual boom rate (CAGR) of around 4% over the last decade, however the cost of inputs like gas and coal grew at a CAGR of nine-15%.
- Economic Pressures: Rising production costs, consisting of wages, fuel, and fertilizer costs, are squeezing income margins.
- Demand-supply gap: The rise in small tea growers and so forth manufacturing, isn’t in proportion with the domestic consumption and exports, leading to surplus manufacturing.
- Weak exports: The Iran marketplace constitutes almost 20% of total tea exports from India and there may be decline of exports to Iran because of the payment issues causing economic stress to the exporters
- A decline in usual export demand due to surplus within the international markets, brought about an International cost crash.
- Export Dependence: India’s tea enterprise relies closely on exports, making it vulnerable to fluctuations in international demand and trade regulations.
- Nepal’s gardens: Unhampered and clean influx of substandard tea from neighboring nations, specifically Nepal” is jeopardizing the tea industry of India.
- Sustainability Issues: There is growing stress to undertake sustainable practices in tea manufacturing. This includes addressing issues together with soil degradation, water usage, and the environmental impact of pesticide use.
- Other factors: Stagnant charges, awareness of marketplace electricity among a few key gamers, and a decline within the supply of teas to make the beverage more lower priced etc. Have been recognized as fundamental factors.
Tea Board of India
- The Tea Board of India is functioning as a statutory body of the Central Government beneath the Ministry of Commerce.
- It was set up by means of the enactment of the Tea Act in 1953, to promote the cultivation, processing, and domestic trade as well as export of tea from India.
- Headquarters: Kolkata, West Bengal
Steps taken by Indian government
- The Tea Board of India had devised a scheme of “Assistance of education stipend to the wards of Small Tea Growers” to improve their livelihood and education needs.
- The Government of India through the Tea Board had helped in the formation of 352 Self Help Group (SHG), 440 Farmer Producer Organisation (FPO) and 17 Farmer Producer Companies (FPCs).
- A mobile app “Chai Sahyog”, is being evolved to assist Small Tea Growers in terms of better cost recognition and statistics.
Way Ahead
- The Government needs to interfere by offering better export infrastructure, completely defraying State obligations by growing the RoDTEP (Remission of Duties or Taxes on Export Products) rate and reducing the hobby cost on borrowings to make Indian tea producers/exporters extra competitive within the international marketplace.
- Steps are needed to adjust tea waste sold within the domestic marketplace at lower costs, restricting import of bad-quality teas, and merchandising of tea emphasizing its health advantages.
Source: The Hindu
UPSC Mains Practice Question
Q. Whereas the British planters had developed tea gardens all along the Shivaliks and Lesser Himalayas from Assam to Himachal Pradesh, in effect they did not succeed beyond the Darjeeling area. Explain. (2014)
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