Indian tea industry seeks higher RoDTEP rates, anti-dumping measures for competitive edge 

INDIA – The Indian tea industry has urged the government to increase the rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to make exports more competitive in the global market.  

In its pre-budget memorandum, the Indian Tea Association (ITA) highlighted that the current RoDTEP rate for bulk tea is 1.7 percent, capped at Rs 6.70 (US$0.080) per kilogram.  

The association called for a higher reward base rate to maintain the competitiveness of black tea exports. 

The RoDTEP scheme, introduced in January 2021, ensures that exporters receive refunds on embedded taxes and duties that were previously non-recoverable. According to official statements, the scheme has already supported over 10,500 export items with Rs 42,000 crores (US$5.02M).  

However, the ITA and the Tea Association of India (TAI) believe the rate for tea should exceed the previous Merchandise Exports Incentive Scheme (MEIS) rate of five percent to retain global competitiveness. 

Additionally, the industry has sought the imposition of an anti-dumping duty on tea imports from Nepal.  

TAI argued that such a measure would prevent the influx of cheap, duty-free Nepalese tea, which often gets passed off as genuine Darjeeling tea, a product with a Geographical Indication (GI) tag. This would help protect the market for authentic Darjeeling tea and boost its exports. 

In its memorandum, the ITA has requested an exemption from the Tax Deducted at Source (TDS) levy on cash withdrawals for the tea sector, citing a lack of banking infrastructure in tea-growing regions.  

Furthermore, the association called for concessional customs duties on specific machinery necessary for tea production, emphasizing the need for modernizing the plantation sector.  

The association pointed out that upgrading machinery, which is not available domestically, is crucial for improving quality and productivity. 

The ITA also stressed the need for increased fund allocation for the Tea Board’s development and promotion scheme for 2021-26.  

They highlighted that the new scheme has discontinued incentives for plantation development and factory upgrades for large growers, leading to a lack of financial support. This situation has hindered tea producers’ ability to improve quality and productivity, impacting the sector’s long-term viability. 

These requests come amid a challenging period for the Indian tea industry. Excessive heat and scant rainfall have significantly impacted production.  

In May, tea production dropped by over 30 percent from the previous year to 90.92 million kg, the lowest for that month in over a decade.  

Consequently, average tea prices surged by nearly 20 percent to Rs 217.53 per kg by late June. 

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