The beleaguered tea industry in Assam urgently requires strategic promotion, especially in overseas markets, to explore new avenues, according to Nalin Khemani, Chairman of Bharatiya Chai Parishad.
Khemani emphasized the need for the Commerce Ministry to enhance tea exports and advocate for the promotion of Indian tea. With an oversupply in the domestic market and lacklustre export demand, he proposed that the government engage with the Tea Board to formulate a comprehensive tea promotion policy, enabling the industry to tap into untapped overseas markets.
In anticipation of the Union interim budget, scheduled for presentation by Finance Minister Nirmala Sitharaman on February 1 during the Budget session of Parliament, Khemani urged the government to address the challenges faced by the tea industry. He pointed out that despite post-COVID stability in tea prices, the industry has been grappling with low sales realization.
As Assam prepares to present its budget for 2024-25 next month, Bharatiya Chai Parishad has appealed to the state government to alleviate the social cost burden on the tea industry. Khemani stressed the importance of a self-sustainable model for the industry, advocating for government intervention to shoulder the social cost burden borne by tea estates historically. He suggested that the government take over the management of garden hospitals to reduce the industry’s social cost burden, ensuring quality medical facilities for workers.
India, ranking as the fourth-largest tea exporter globally, faces challenges such as rising production costs, stagnant consumption, subdued prices, and crop losses due to climate change. The tea industry, a significant contributor to India’s global tea output and a major employer, particularly in Assam, has struggled to compete in the international market.
Highlighting the cost-intensive nature of the tea business and the fixed costs involved, Khemani emphasized the industry’s need for a supportive environment. Recent reports suggest an anticipated 8% degrowth in revenue for the tea industry in India this fiscal year, driven by a decline in exports and lower tea prices. Operating profitability is expected to decrease for the second consecutive year. Addressing these challenges is crucial to sustaining and revitalizing the tea industry in the region.
