Volume of export of Indian tea during 2014-15 has been lower than the level registered during 2013-14 primarily on account of fall in production of Assam Orthodox tea caused by delayed rains. Other factors that have contributed to the decline are increased supplies from Kenya leading to reduced average price of US$ 2.14/kg in the international market, and fall in demand in the high-value markets such as USA, Iran and Russia.

 The objective of the Merchandise Exports from India Scheme is to promote, inter alia, export of value added teas with a view to gain maximum foreign exchange earnings as against the export of bulk teas, which have limited potential for branding of India Tea. As per the Foreign Trade Policy (2015-2020) notified by the Directorate General of Foreign Trade (DGFT) most of the teas in packaged or value added form will receive reward at the rate of 5% of Free on Board (FOB) value for export to various destinations, whereas tea in bulk form including tea waste and other black tea will be eligible for reward at the rate of 3% of FOB value.

 Representation has been received from the Indian Tea Association suggesting restoration of the reward rate for bulk tea exports from 3% to 5% of FOB value as available under the previous Foreign Trade Policy (FTP). Such representations are regularly reviewed by the Government as part of updation of the FTP. Tea Board also has a strategy for increasing export of Indian tea with added focus on value-added teas. This includes setting up value-addition infrastructure, branding and sustained promotion in the key markets.

 This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

Export incentive rates for tea under the Foreign Trade Policy shape exporter behaviour and are under review following industry representations. Under the Merchandise Exports from India Scheme in the Foreign Trade Policy, packaged and value added teas receive a higher reward rate than bulk teas to promote branding and maximise foreign exchange; the Indian Tea Association has sought restoration of the higher reward for bulk tea, and such representations are reviewed by the government while the Tea Board pursues value addition, branding, infrastructure and market promotion.