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Calcutta, May 26: Tea traders in India and Pakistan are pinning their hopes on the new Nawaz Sharif-led government to boost bilateral trade by offering sops and making corrections in the duty structure.
Pakistan has a complicated tax structure, which results in the importers paying an approximately 34 per cent additional cost by way of various tariffs over and above the price of tea.
A delegation from India is slated to visit Pakistan by the end of June to meet the importers. A visit to Egypt is also on cards.
“The Pakistan market slowed down because of the elections. Business almost came to a halt. The momentum is now picking up. With the change of the government there, we are hoping that it will be more favourable to business and there will be lots of sops for trade and encouragement for tea as well,” Azam Monem, whole-time director at McLeod Russel and additional vice-chairman of the Indian Tea Association (ITA), said.
“The earlier government had increased tax on tea and they feel the new government to be more sympathetic to the needs of trade. However, one has to wait for their budget that is expected by June-end. We are planning to take a delegation there by that time,” he said.
Monem said Egypt had also remained subdued for quite sometime. “We will go there as well to look into issues of exchange rates and the local economy.”
Pakistan meets about 65 per cent of its crush, tear, curl (CTC) requirements from Kenya. In March, it imported about 1.15 million kg from India, of which 7 lakh kg was met from south India and about 4.50 lakh kg from the north.
Last year, the Pakistan Tea Association (PTA) had signed a memorandum of understanding with the ITA to import 50 million kg from India by 2015.
According to ITA joint secretary Sujit Patra, Pakistan used to import about a million kg from India 5-7 years back, but the exchange of delegations and trade meetings have led to a significant jump in imports.
“In 2012, they took about 23.63 million kg from India, paying an average price of $1.69 per kilo. In 2011, they imported 25.2 million kg, paying a unit price of $1.42. There is a very good scope of increasing exports to Pakistan as their imports through the official channel are close to 130 million kg. We could be a viable alternative because compared to us they pay close to $3 a kilo for the tea to Kenya,” Patra said.
Earlier, PTA chairman Mohammed Hanif Janoo had said steep import duties in his country along with the basic customs and sales tax might engender grey channels.
Source : telegraphindia.com
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