The proposed move by Union finance minister Yashwant Sinha to increase customs duty of tea to 35 per cent from 15 per cent is expected to improve the tea trade sentiment and stop the fear of the future with regard to imports of tea affecting the prices.
Speaking to Business Standard, Indian Tea Association chairman R S Jhawar said, "This is a welcome step, which will give a psychological support to the tea industry".
The industry is also working on a plan to ensure import of proper quality tea.
"The ministry decision along with our initiative will result in arresting import of cheap tea into the country," Jhawar added.
The tea industry, which is passing through a difficult time, witnessed substantial decline in prices despite the fact that overall production was down globally in 1999.
In India, tea production was down by 65 million kg last year. But the surprising factor has been the declining tea prices in a shortfall situation and tea experts have given several explanations to this.
Imports of tea have been regarded as one of the factors affecting the tea industry adversely for quite some time, according to sources. While import figures are not clear to the industry, it is believed that 20 million kg of tea have been imported to India.
