Guwahati: UK Singh, the Chairman of the Assam Chapter of the Tea Association of India, announced during the 36th biennial general meeting in Tezpur that a Comprehensive Economic Partnership Agreement (CEPA) between India and Bangladesh is in the pipeline. This agreement would function akin to a free trade agreement to promote liberalized trade in goods and services, promote investments, enhance economic relations, ensure fair competition, and explore new avenues for collaboration.
Singh highlighted the need for reforms in the Plantation Labour Act and urged continuous innovation and aggressive marketing strategies. He said that tea should be officially declared a national drink. Moreover, solutions such as precision agriculture and technology adoption were proposed at the meeting.
Bangladesh currently ranks as the 10th biggest player in tea production and has experienced notable growth over the past 15 years, the Chairman said. Despite becoming a significant tea importer, recent high import duties have impacted trade dynamics, particularly with India. "The decline in Indian tea exports to Bangladesh has raised concerns, necessitating a reassessment of duty structures," he said.
To tackle these challenges, the proposal for a Comprehensive Economic Partnership Agreement (CEPA) between India and Bangladesh, resembling a free trade agreement, has been put forward, and a Preferential Trade Agreement (PTA) is also suggested as a mutually beneficial option to reduce tariffs on agreed product categories, he added.
India has proposed measures such as increased trans-shipment of goods via Indian ports and the import of tea from its northeastern states to boost trade and connectivity with Bangladesh. Furthermore, the potential market for tea produced in India's Barak Valley, which shares characteristics with tea consumed in Bangladesh, is highlighted. "However, there is a need for a roadmap to address trade-related issues and infrastructure upgrades, particularly at Land Customs Stations, to facilitate the smooth flow of trade," the chairman remarked.
Amid the challenges of a demand-supply gap, market concentration, and declining tea quality, Assam has seen a remarkable growth rate of 41% in tea production. India's tea exports until October 2023 reflect a 2% decrease compared to the previous year, amounting to 182.69 million kilograms in 2022.
Tea prices have also remained relatively stagnant over the years, except for a notable surge in 2020. In 2023, North Indian Tea Prices stood at Rs. 187 vis-à-vis Rs. 202 reflecting a 7% decline. Meanwhile, the Tea Association of India has called for collective efforts, policy reforms, and innovative strategies to ensure the sustainability and growth of the tea industry.
Additional challenges discussed during the meeting included the industry downturn, the impact of climate change, minimum wage issues, and the escalating costs of food grains.
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