The Centre is exploring the feasibility of introducing mandatory auction for teas imported from Nepal, in an attempt to ensure better monitoring of the distribution of Nepalese teas in India.
The Tea Board has written to stakeholders in the tea industry seeking their feedback on the proposal, considering all possible scenarios such as pre and post auction processes and effectiveness of traceability of Nepal tea from the point of entry to the distribution to the end consumer.
The proposal is aimed at proper distribution and to safeguard the interest of Indian tea industry, the government said. The move appears to follow concerns raised by the Darjeeling tea industry about the substandard quality of Nepalese varieties coming to India.
A mandatory auction can be one of the effective tools to monitor if hazardous teas are reaching Indian consumers. The proposal is also in line with the mandate given by the Board to put 100 per cent of dust teas on auction in order to maintain quality of tea produced and sold in India.
The proposal mooted by the Centre coincided with a white paper published by the Indian Tea Association on Darjeeling tea on Tuesday, seeking urgent fiscal and non-fiscal intervention from the Centre and the Bengal government.
The paper showed that 13.66 million kg of tea was imported from Nepal to India in 2023 at ₹143.65 a kg, at least half of which is of the orthodox variety (leaf tea) and competes with Darjeeling. A large quantity is often sold in the market as Darjeeling tea to gullible consumers.
ITA has mooted a minimum import price for Nepal tea to provide a level playing field for Darjeeling tea, which has a production cost of ₹650 a kg on an average.
Nepal tea enjoys a duty-free access to the Indian market under the bilateral Free Trade Treaty of 2009, even though it imposes a 40 per cent duty on Indian tea entering Nepal, putting Darjeeling tea on a sticky wicket. However, India has been hesitant to check the influx of Nepal teas due to geo-political consideration so far.
While the effectiveness of a mandatory auction is being hotly debated within the tea circle, an ITA paper, submitted to Bengal labour minister Malay Ghatak, seeks an urgent fiscal package.
Arijit Raha, secretary-general of the association, said a financial aid to the industry would not cost more than ₹50 crore a year but it would go a long way to support a financially stressed industry which has immense social, economic and cultural importance.