Tea Industry Sees Growth In India
Sept. 4 – In a stroke of fortunate luck, despite the devaluing rupee, Indian tea exporters have benefited recently thanks to tea producers lowering their prices which has in turn made them much more competitive globally.
The decrease in the value of the rupee has actually come at a somewhat opportune time for Indian growers since Kenya (a major competitor to India) recently had a bumper crop and was able to lower its prices to a level that India would have previously struggled to compete with. As a result, many of India’s largest tea producers, such as McLeod Russel, Joonktollee Tea & Industries and the Goodricke Group are forecasting a 10-20 percent increase in global tea exports.
Indian Tea Board Chairman, M.G.V.K. Bhanu, has identified the following five markets for which India should focus on for tea exports:
- the United States; and
Together, these five countries make up 42 percent of India’s total tea exports. Specifically, the U.S. is the third largest tea importer in the world, having imported 126 million kilograms of tea with 84.4 percent being black tea (India’s specialty tea product).
“A number of initiatives have [already] been taken towards strengthening our stand in these markets, and we have achieved tremendous success,” commented Chairman Bhanu.
The Indian tea industry is expecting to hit an export target of 230 million kilograms this year.
The Indian domestic market for tea is also seeing growth. Chairman Bhanu claimed that Indian domestic consumption of tea totals between 800-900 million kilograms annually. In addition, the country routinely sees yearly increases in its production of tea. Usually, production increases cause prices to fall, but due to the rise in domestic consumption this has thankfully not been the case.
As a result, this situation has led Chairman Bhanu to stress the importance of protecting the burgeoning domestic tea consumption market, with part of his plan being the promotion of tea’s health benefits and ensuring that a high quality product reaches shelves.
Minister of State for Commerce and Industry D. Purandeswari has also introduced an online system to track product quality, and two tea advisory councils have been set up to monitor tea exporters.
India is currently the world’s second largest tea producer and consumer.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
You can stay up to date with the latest business and investment trends across India by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.