Kolkata, Jan 28 (PTI) The concluded India-European Union Free Trade Agreement (FTA) is expected to create fresh export opportunities for the Indian tea industry, though regulatory compliance and rising costs remain major concerns, the Tea Association of India (TAI) said on Wednesday.

The agreement -- officially titled the India-EU Trade and Investment Agreement -- aims to deepen bilateral trade by reducing tariffs, addressing non-tariff barriers and strengthening regulatory cooperation across sectors.

"The FTA significantly enhances India's competitiveness in the EU market and provides expanded access for Indian tea, particularly green tea categories where duties are expected to be eliminated," TAI president Shailja Mehta said.

India exports around 19-21 million kilograms of tea annually to EU countries, with Germany and Poland accounting for a substantial share of shipments and serving as major entry and redistribution hubs within Europe.

While import duty on black tea is already nil, the association said removal of duties on certain green tea segments under the FTA would further strengthen India's export potential.

However, Mehta cautioned that non-tariff barriers continue to pose challenges.

"EU regulations relating to maximum residue limits, food safety, traceability, packaging and labelling remain critical issues for Indian exporters," she said, adding that the industry expects provisions ensuring regulatory transparency and science-based standards, along with timely consultations before new rules are introduced.

Under the agreement, preferential access to the EU market will be subject to rules of origin, requiring adequate processing or manufacturing within India.

"The product-specific rules are broadly aligned with existing supply chains and provide flexibility, while ensuring substantial processing in the exporting country," Mehta noted.

TAI said the agreement holds "significant promise for expanding market access and improving competitiveness of Indian tea in the EU", but stressed that complementary domestic support would be essential to fully leverage the benefits.

"Exporters, particularly small and medium enterprises, will require support for certification, testing, traceability systems and capacity building," Mehta said, warning that emerging EU norms on sustainability, environmental compliance and human rights due diligence could increase compliance costs.

Early stakeholder consultations and alignment of domestic schemes with FTA commitments will be critical to ensure that Indian tea producers are well-prepared to benefit from the India-EU trade pact, the association added. PTI BSM NN

India-EU FTA expands export access for Indian tea but raises compliance costs from rules of origin and EU standards. The India EU Trade and Investment Agreement expands export access for Indian tea by eliminating duties on certain green tea segments and granting preferential access subject to product specific rules of origin requiring substantial processing in India. EU non tariff measures-maximum residue limits, food safety, traceability, packaging and labelling, and sustainability and human rights due diligence-pose compliance challenges that may raise costs, prompting calls for regulatory transparency, timely consultations and domestic support for certification, testing and capacity building to enable exporters, especially SMEs, to benefit.