Introduction

• Echoes of the Past: India’s tea industry is facing challenges similar to the “dark phase” of 2002-07, as noted by the Tea Association of India (TAI).
• Key Concerns: Stagnant prices, oversupply, demand-supply gap, and a trend towards cheaper teas are major issues impacting the industry.

Historical Context and Recent Developments

• Previous Crisis: The industry suffered a significant slump during 2002-07 due to regulatory challenges, falling demand, competition from cheaper international teas, and export quality concerns.
• Current Scenario: Despite India’s economic strides, the tea industry struggles with stagnant prices and increasing input costs, leading to estate closures and reliance on subsidies.

Demand-Supply Imbalance and Quality Concerns

• Oversupply Issues: The meeting highlighted the critical problem of oversupply leading to an imbalance between availability and consumption.
• Quality Decline: To make tea more affordable, there has been a decline in quality, resulting in a “race to the bottom.”

Proposed Measures and Tea Board of India’s Role

• Repositioning Tea: TAI suggests repositioning tea to enhance its perception and consumption patterns.
• Regulatory Steps: Measures include regulating tea waste sold domestically, restricting import of low-quality teas, and promoting tea’s health benefits.
• Potential Impact: Regulating waste could reduce supply by 15-20 million kg, and limiting imports could remove an additional 30 million kg of low-quality teas.

Tea Industry Statistics and Trends

• Production and Export: India’s tea production increased by 39% from 2008 to 2022, with a slight projected increase in 2023. However, exports till October 2023 decreased by 2% compared to 2022.
• Import Increase: Tea imports rose from 27 million kg in 2021 to 30 million kg in 2022.

Overview of the Indian Tea Industry

• Global Standing: India is the second-largest tea producer and the fourth-largest exporter globally, with a significant domestic consumption market.
• Employment and Regulation: The industry directly employs 1.16 million workers, with the Tea Board of India regulating cultivation.
• Main Growing Regions: The Northeast, including Assam, and north Bengal are major tea-growing areas, with significant cultivation in the Nilgiris in south India.

Challenges and Issues

• Global Competition and Quality Decline: Competition from countries like Kenya and the demand for organic tea have affected India’s market position.
• Worker Conditions and Small Tea Growers: Poor worker conditions and challenges faced by small tea growers, including pricing and recognition issues, are significant concerns.
• External Factors: Global events like the Russia-Ukraine war have further compounded problems for the industry.

Tea Board of India Initiatives

• Establishment: The Tea Board was set up under the Tea Act 1953 and functions as a statutory body under the Ministry of Commerce. Headquarters are located in Kolkata, the Board is reconstituted every three years.
• Promotional Efforts: The Board undertakes various initiatives to promote packaged Indian tea and subsidizes participation in international fairs.
• Promotional Activities: The Board supports packaged Indian tea promotion and subsidizes participation in international fairs.
• Tea Development and Promotion Scheme: This scheme aims to enhance productivity, quality, worker welfare, and market promotion.
• Support for Small Growers: The Board has formed SHGs, FPOs, and FPCs to assist small tea growers.

Way Forward

• One District One Product (ODOP) Program: This program can help promote Indian tea.
• Improving ‘AROMA’: ‘AROMA’ stands for Assistance to small growers, Re-energizing infrastructure, Organic and GI tea promotion, Modernization of supply chains, and Adaptability to climate change.
• Supporting Small Farmers: Enhancing production, quality, and sustainability while focusing on high-value markets is crucial for the industry’s growth.

Try this PYQ from 2022

Consider the following States:

1. Andhra Pradesh
2. Kerala
3. Himachal Pradesh
4. Tripura

How many of the above are generally known as tea-producing States?

(a) Only one State

(b) Only two States

(c) Only three States

(d) All four States

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