Government mulls sops for Orthodox tea growers

Alarmed by declining tea exports, the government plans to offer incentives to tea growers for producing more orthodox tea so that India captures a larger market share abroad, a senior commerce ministry official said on Tuesday.

"We are in the process of working out a plan to give more incentives to tea growers to produce more orthodox tea. We feel there is a need to focus more on orthodox tea rather than CTC (crush, tear and curl) tea," the official said.

The commerce ministry will soon unveil the details of the incentives to encourage tea growers to produce more orthodox tea, the official said. India currently has surplus tea production of over 25 per cent. To attract more overseas buyers, the tea industry now plans to tinker with the product mix.

While India mainly sells CTC tea abroad, the international market has shown a penchant for orthodox tea.

Orthodox and CTC are the two methods to process tea. Premium tea is made through the orthodox method, a time-consuming process that requires working with small batches of tea, making the product more expensive.

With support from the government, tea growers should change the product mix as soon as possible""else India will further lose market share in global markets, the official said.

India manufactured orthodox tea in bulk quantities for the global market till about a decade ago. However, as the country lost its share in the European markets to tea producers like Kenya and Sri Lanka, local companies shifted to producing CTC tea to capture markets in West Asia.

While orthodox tea is preferred in Europe and the US, CTC is popular in West Asian nations. India is losing out to Sri Lanka and Kenya in the global market, as the tea produced in India is more expensive.

"There is no need to worry as tea exports have started showing signs of improvement after January. However, if the product mix is not modified soon, we will have serious problems," the official said.

India exported 12.87 million kgs of tea in January, down nearly 7 per cent from a year ago.

Last month, China, the world's largest tea producer, evinced interest in buying tea in bulk from India. A Chinese delegation visited tea-growing areas and auction centres in the eastern and southern parts of India.

India is the world's largest tea producer. In 2004, it produced 820.22 million kgs of tea.