A new tea policy brewing in Assam; incentives for exports, machinery under consideration
Oct 20, 2022
New Delhi [India], October 20 : Renowned globally for its richly coloured and aromatic tea, Assam the country's largest tea producer is now working on a new policy for its nearly 200-year-old tea industry.
India as a whole contributes 23 per cent to the global tea output and employs around 1.2 million workers in the tea plantation sector.
Assam produces nearly 700 million kg of tea annually and accounts for around half of India's overall tea production. The state also generates foreign exchange earnings estimated at an equivalent to Rs 3,000 crore.
However, for several years now India's tea industry has been struggling with issues such as rising production costs, relatively stagnant consumption, subdued prices and crop losses due to climate change. It also has to face the challenge of a competitive global market.
On Wednesday, the state's industries and commerce minister Bimal Borah chaired a meeting in Guwahati on the proposed draft 'Tea Policy' with representatives of the tea industry bodies along with other relevant stakeholders, including auctioneers and buyers.
Among other salient features discussed at the meeting, the state government is mulling providing support to exporters for sending tea directly from Assam to overseas destinations.
ANI has learnt that a financial incentive of Rs 5 per kg is under consideration with an aim to compensate additional expenditure on transportation and terminal handling charges of tea while being shipped out.
The draft policy, which is seen by ANI, has provisions for the exemption of SGST (State Goods and Service Tax) for the tea which are sold through the Guwahati Tea Auction Centre - one of the world's major tea trading centres.
"SGST reimbursement at 40 per cent shall be provided to the buyers," the draft tea policy said.
For the replacement of old and worn-out machinery and for the installation of additional machinery, the state intends to provide 25 per cent of the actual cost of the plants and machinery, subject to a ceiling of Rs 50 lakh.
Further, for setting up of new blending, packaging units, value addition units and instant tea unit expansion of existing units or replacement/ addition of existing units, an incentive of 30 per cent of the actual cost subject to a ceiling of Rs 50 lakh is part of the discussions.
Setting up of tea boutiques in major tourist places in Assam as well as major cities across India are among the steps that the state has planned to improve the visibility of Assam Tea. The state is famed for both Orthodox as well as the CTC (Crush, Tear, Curl) varieties of teas.
To implement this, up to 50 per cent of capital investment with a ceiling limit of Rs 20 lakh is likely to be borne by the state government for setting up such boutiques inside the state. For outside of Assam, it may raise the ceiling limit to Rs 40 lakh.
The state government is also planning to organize annual tea festivals to commemorate International Tea Day, which is celebrated every year on May 21.
"A sum of Rs 50 lakh per year shall be parked for Tea Festival," the state's draft tea policy read.
An annual award for the tea sector and the development of an e-commerce platform are among the non-monetary incentives for the industry mentioned in the draft.
The tea business is cost-intensive, where 60-70 per cent of the total investment is fixed cost. Assam, recently raised daily wages for tea garden workers by Rs 27, over and above other benefits, to which they are entitled.
Post the revision, tea workers in Assam's Barak valley will get Rs 210 per day and for that of Brahmaputra valley Rs 232. Just ahead of State elections in 2021 too, the BJP government in Assam had hiked the wage rate by Rs 38.
