Kolkata, Sep 27 (IANS) The Centre will examine the tea planters' appeal to incentivise the orthodox tea production in order to compete in the global markets, an official said here on Thursday.
Addressing the 135th Annual General Meeting, Indian Tea Association Chairman Azam Monem said if exports are to grow, incentivisation and hand-holding by the government would be vital.
Given the fact that orthodox and green tea comprise over 50 per cent of the global export demand, augmenting orthodox production is key for boosting exports, he said.
"We need a larger production of orthodox tea as its demand in several overseas locations is significant. For Indian tea to compete and produce more orthodox, the incentive on orthodox tea production has to increase from its present level of Rs 3/kg to Rs 20/kg, as that alone can motivate the Indian producers to upscale orthodox manufacture," Monem said.
He said the country's orthodox production has come down from 231 million kg in 1950 to around 120 million kg today.
"We will examine whatever the industry needs. Whatever is possible for us to do, we will certainly do," said Anup Wadhawan, Secretary Ministry of Commerce and Industry.
Wadhawan also pointed out that the production side of the tea industry and processing associated with it has been facing challenges in terms of financial viability.
"There must be challenges in the marketing and distribution but the fundamental challenge seems to be on the production side. The industry also faces labour shortages," he said, adding that interventions related to productivity could provide a window for addressing the labour shortage issue.
He said plantation sectors should interact with each other and learn from best practices globally and also from other plantation sectors.
"There are some issues which were brought to my notice that some of the planters in the informal sector might not be following regulations as strictly as the formal sector," Wadhawan said, adding that the industry needs to resolve this issue.
However, Monem said that the industry, with larger orthodox production, can effectively compete with Sri Lanka which has been enjoying an enviable presence in several markets including Russia, Iraq, Libya and Syria.
According to him, it is imperative that tea exports remain at the forefront where we can substantially gain and move in both volume and value from the current 252 million kg valued at Rs 5,000 crore to at least 300 million kg at over Rs 7,000 crore in the next three years.
Enhancement of MEIS Reward Rate from 3 per cent to 5 per cent had taken place in 2017 and a further enhancement to 11 per cent will help the industry to consolidate its presence in key markets such as Iran, Iraq, China, Egypt, Libya and Kazakhstan, Monem added.
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