Tea cos fear loss in biz if import duty is reduced.

GOLAGHAT: Assam's tea sector representatives are apprehensive about the prospect of reduction of import duty on tea from other countries under the ASEAN Free Trade Agreement (AFTA) signed in 2008-9.

Tea Board chairman Prabhat Bezboruah said the government is obligated under AFTA to reduce agri-commodity import tariffs to 50%. "However, the government (Centre) has referred the matter to the Tea Board for our comments and inputs. We have sent our reply objecting to the proposal, emphasizing on the potential risks to our industry," Bezboruah said.

A day ahead of the annual general meeting of North Eastern Tea Association (NETA) here on Saturday, members have expressed fear that once the import duty is reduced, the Indian market will be flooded with cheap tea from other countries, especially from southeast Asia.

NETA adviser Bidyananda Barkakoty said if the import duty is reduced, India cannot compete with other tea-producing countries primarily because of its low land and labour productivity. "Our input costs are very high. We do not have control over inputs costs on coal, natural gas, electricity, fertilizers and other inputs required for tea industry," he added. "Under the AFTA agreement, [the import duty of] 110% is to be brought down to 50%. If this happens, India will not be able to compete with the cheap tea flooding our market. We will appeal to the Tea Board and the union commerce ministry to reconsider this decision," NETA chairman Manoj Jallan said.