Tariff Gamble
US President Donald Trump has once again turned to tariffs as a tool to reshape global trade. The latest round of levies introduces a 10 per cent baseline tariff on all imports while imposing higher duties on select countries.
A major discrepancy between the tea import figures published by the Tea Board of India and the actual volume of imports has raised serious concerns in the industry, according to Sandeep Singhania, president of the Tea Association of India (TAI).
He highlighted alarming violations of existing import and re-export regulations, which are severely impacting the credibility and economic sustainability of Indian tea.
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Under the Tea (Distribution & Export) Control Order, 2005, any tea exported as “Indian Tea” must be 100 per cent sourced from Indian plantations, and any export containing imported tea must be labelled as “Multi-Origin Tea.” Furthermore, imported tea meant for re-export requires a minimum of 50 per cent value addition and must be exported within six months. The Tea Board had also mandated importers and exporters to declare all transactions on its Tea Council portal. However, large-scale non-compliance has resulted in misleading data and potential exploitation of the duty-free import provisions.
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Industry sources indicate that import figures reported by tea importers show up to a tenfold mismatch when compared with export records from countries such as Kenya, Nepal, Vietnam, and Iran. This discrepancy is primarily due to importers failing to declare their imports on the portal, thereby concealing actual figures. Moreover, duty-free imported teas, originally meant for re-export, are being illegally sold as “Indian Tea,” tarnishing India’s global reputation and depressing prices in both export and domestic markets.
The TAI has urged immediate action, including stricter enforcement of import declarations, financial penalties for violators, and a reconsideration of duty-free imports for re-export. The association has also called for greater powers for the Tea Board, Sri Lanka-style import testing, and the activation of the North Indian Tea Council to monitor trade practices. Failure to act, TAI warns, could deal a devastating blow to the already struggling tea industry.
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