investors are not willing to invest in Pakistan. However, WTO and tradepolicies encourage the import of raw materials for Tea industry.
Tea Import Quota
It is an important consideration. Each year there is a certain quota on teaimport in total imports of Pakistan. Each player is given quota to import andmanufacture so one can say that it is a very regulated industry.
The relations with the tea producing nations and Pakistan play a vital role aslarge part of imports comes from Kenya, but now Pakistan is also importingtea from India.
Unstable Geographic Conditions
Pakistan is situated at a very critical and geographically strategic location.Due to the uncertainty new investors are not ready to invest in Pakistan.
Economic conditions of an environment have a direct impact on thedevelopment of any industry. The recent economic recession in the world hashad an impact on Pakistan’s economy as well.Pakistan's economy mainly encompasses textiles, chemicals, foodprocessing, agriculture and other industries. In 2005, it was the third fastestgrowing economy in Asia. Since the beginning of 2008, Pakistan's economicoutlook has taken a dramatic downturn. Security concerns stemming fromthe nation's role in the War on Terror have created great instability and led toa decline in FDI from a height of approximately $8 bn to $3.5bn for thecurrent fiscal year. Concurrently, the insurgency has forced massive capitalflight from Pakistan to the Gulf. Combined with high global commodity prices,the dual impact has shocked Pakistan's economy, with gaping trade deficits,high inflation and a crash in the value of the Rupee, which has fallen from60-1 USD to over 80-1 USD in a few months. For the first time in years, itmay have to seek external funding as Balance of Payments support.