The union commerce ministry is believed to have assured the tea industry that it will stop import of tea for sale in the domestic market after June, though for the time being, it has rejected the industry's plea against allowing imports.
But the industry feels that if the ministry had withdrawn the policy immediately, some more damage could have been avoided which the industry is incurring by way of cheaper and poor quality imports.
So long it was uncertain whether the ministry would continue this policy after June as a result of which the traders and exporters, mainly multinationals, were shying away from the auctions failing to make any long-term plans, said sources. Hence, this guarantee will be a much needed shot in the arm for the industry.
It may be mentioned that the industry raised a hue and cry when the commerce ministry allowed tea import for sale in the domestic tariff area (DTA). Earlier, import of tea was only allowed by export-oriented units (EOUs) or in export processing zones (EPZ) wholly for re-exports and not for domestic sale.
The alarm over import of tea is mainly driven by the apprehension that free imports could adversely affect general tea price levels.
Tea prices have already crashed to the level prevailing in the corresponding period of last year.
According to industry experts, the boom, which was to sustain till August, is over.
Meanwhile, Indian tea exports have shot up by 77 per cent in the first quarter of 1998 to Rs 514.62 crore from Rs 290.44 crore in the corresponding period of the previous year.
In volume terms exports in the first quarter have increased by 24 per cent to 46.5 million kg from 37.76 million kg during the period under review, according to Tea Board.
According to the board, in 1997-98 the industry achieved the landmark production figure of 838 million kg.
Tea exports have gone up to 211.76 million kg last year against 169.4 million kg in the previous year.
Exports contributed Rs 1,954 crore last year to the industry which had brought in Rs 1,301 crore in the previous year.
