Amritsar tea traders hit hard by Pak's decision

Local tea traders are keen to revive trade relations with Pakistan

Local tea traders have been hit hard by the Pakistani government's refusal to accord 'Most Favoured Nation (MFN)' status to India. They were expecting a surge in trade after normalisation of relations with Pakistan.

The annual turnover of the tea industry is about Rs 200 crore and the local traders are keen to revive trade with Pakistan, which is the second-largest consumer of tea in the world.

According to Amritsar Tea Traders' Association (ATTA) President Rajinder Kumar Goel, Pakistan is importing tea from Sri Lanka and Kenya, which is not only inferior in quality but also expensive.

The ATTA has 300 registered members with five entrepreneurs who have an annual turnover of about Rs 20 crore and another five with Rs 10 crore (all in black tea).

Interestingly, Amritsar, which is neither a consumer nor producer of green tea, is the biggest trading hub of green tea in the country.

Traditionally, the local market had been supplying green tea as well as CTC (black) tea to destinations as far as Iran, Iraq (in central Asia), Afghanistan and Pakistan. However, USSR's invasion of Afghanistan in 1979 dealt a severe blow to the trade here.

Later, bitter relations between India and Pakistan affected the trade adversely and Pakistan banned the land route for Indian goods in 1995. Goyal recalled that an annual export of about six to seven million kg of tea to Pakistan came to an abrupt end.

Since Amritsar is close to the border, the freight charge is just Rs 4 per kg tea to Afghanistan via Lahore and Peshawar. By air the charges are Rs 65 per kg.

The traders feel that Pakistani consumers would also benefit since they would get good quality tea at reasonable price.

At present the local tea trade has narrowed down to just bordering towns of Gurdaspur, Ferozpur and some other pockets of state and local market.

Impact of losing such a wide market could be gauged from the fact that from 80 green tea processing units in 1995, the city now has merely 15 functioning units.

Besides, the Tea Board of India, an autonomous body of the Government of India, the ministry of commerce, also had its office here.

However, it was closed a few years after Pakistan disallowed land route to Indian goods.