ASSIGNMENT

OF

“DOCUMENTATION AND LOGISTICS

FOR INTERNATIONAL BUSINESS”

Topic- Analyze trends in imports/ exports, major markets for these commodities, problems
and challenges faced by the importers/ exporters and latest foreign trade policy rules and
regulations pertaining to it and using appropriate tool to analyze the trade data collected.

SUBMITTED BY: SUBMITTED TO:

Shashwat Shukla MS. SUPRIYA LAMBA
A1833318033
BBA (IB)
SEMESTER- 5
SECTION-E            
 Commodity : Tea
INTRODUCTION
 Tea is one of the important beverages in this world. India and China are the major
tea producing countries of the world. India and China are also the major tea
exporters in this world. Tea industry is playing very important role in tea
producing countries because it gives major income for the country. Tea is one of
the oldest industries in India and today it enjoys the status of one of the best
organized industries in the country. Although tea has been known since 2737 B.C.
and consumed as a beverage for 1250 years, its cultivation in India commenced
very recently. The discovery of indigenous tea in Assam in 1823 led to the origin
of the tea industry in India. However, the Kolkata Agricultural Society differs from
the above opinion. It has consistently held that in the early 1700’s, the ships of the
East India Company frequently brought the tea plants in the country by way of
curiosity. Col. Kyol, a resident of Kolkata and a famous botanist, saw tea plants
growing in his garden in 1780. This information was sent to Sir Joseph Bank and
in 1782 his garden as handed over to Botanical Garden of Kolkata. In 1788, Sir
Joseph Bank recorded the existence of indigenous tea growing wild in Coochbehar
and Rangpur districts of Bengal and suggested the cultivation of this plant. The
wild teas of Coochbehar confirmed the first discovery of indigenous tea in India.    

HS codes for Tea

HS codes : 0902
 HS stands for Harmonized System. It was developed by the WCO (World
Customs Organization) as a multipurpose international product nomenclature that
describes the type of good that is shipped. 
Key Markets and Export Destinations

 Total tea export stood at US$ 830.90 million in FY19 and US$ 709.28
million in FY20 (till February 2020).
 India stands fourth in terms of tea export after Kenya (including
neighbouring African countries), China and Sri Lanka.
 As of 2019, India was the second largest tea producer in the world with
production of 1,339.70 million kgs. During January-February 2020*,
estimated production of tea stood at 30.54 million kgs.
 The country is home to a wide variety of teas, including CTC tea, orthodox
tea, green tea and organic tea. Unlike many other teas producing and
exporting nations, India has a manufacturing base for both CTC and
orthodox tea in addition to green tea.
 India offers high-quality specialty teas, such as Darjeeling, Assam Orthodox
and the high-range Nilgiris, which have a distinctive aroma, strength, colour
and flavour.

Production of Tea
World tea production (Black, Green and Instant) increased significantly by 6
percent to 5.07 million tonnes in 2013. Black tea output increased by 5.4
percent in response to continued firm prices while green tea output increased
by 5.1 percent . Growth in world output was due to major increases in the
major tea producing countries. China remained the largest tea producing
country with an output of 1.9 million tonnes, accounting for more than 38
percent of the world total, while production in India, the second largest
producer, also increased to reach 1.2 million tonnes in 2013. Output also
increased in the two largest exporting countries where production reached
436 300 tonnes in Kenya and 343 100 tonnes in Sri Lanka. Apart from the
7.5 percent decline in Vietnam to 185 000 tonnes, production in other major
producing countries increased: Indonesia to 152 700 tonnes; Bangladesh to
66 200 tonnes; Uganda to 58 300 tonnes; Malawi to 46 500 tonnes; Tanzania
to 32 400 tonnes; and Rwanda to 25 200 tonnes. Other producers in Africa
 recorded slight increases: Burundi to 8 800 tonnes; Zimbabwe to 8 500
tonnes; and South Africa to 2 500 tonnes.

Production trend of Tea in India

ICRA NSE 0.60 % estimates that 6-7 per cent of the annual production of tea,
primarily of the first flush variety, of North India (Assam and West Bengal) based
organised players and another 5-6 per cent from South India (SI) are likely to get
impacted in CY2020. Consequently, production from the organised segment is
estimated to decline by 45-50 mn kgs. A similar impact on the small tea growers’
segment would result in a further estimated decline of 45 mn kgs

The ministry of home affairs through its latest clarification provided on April 3,
2020, has exempted the tea industry from the lockdown, with the condition that
only 50 per cent of the workers can be involved in estate activities at a point in
time. The state governments and district magistrates are now required to pass
similar orders and come up with adequate guidelines before tea estates can restart
operations.

Import and export trend of Tea

India is a net tea exporter. India’s total tea export stood at US$ 769 million while import stood at US
$ 39.5 million in 2017.

The top 5 countries to which India exports are-

 Top 5 countries from which India imports are-

The trade data of tea can be categorised as black and green tea. More than 97% of
the tea export from India is for black tea.
Category wise tea trade statistics is-
 

India’s green tea export was valued at US$ 18.8 million and black tea export was
valued at US$ 750.2 million in 2017. Major importers of green tea from India are
Germany, USA, UAE, Australia, United Kingdom and the Netherlands. Major
importers of black fermented tea from India are Iran, Russia, USA, UAE,
Kazakhstan, United Kingdom and Germany.
India also imported US$ 39.5 million of tea in 2017 of which 35.7 was black tea
and 3.7 was green tea. Major exporters of green tea to India are China, Indonesia,
Vietnam and Germany. Major exporters of black tea to India are Kenya, Nepal,
Vietnam, Argentina and Iran.
Tea is the most consumed, one of the cheapest beverage among all the beverages
available in the Indian market. Tea industry provides direct employment to more
than a million workers and over a million are engaged in the tea industry indirectly.
Most popular and widely recognised tea varieties produced in India are- Assam tea,
Darjeeling tea, Nilgiri tea and Kangra tea. India commands premium in the world
tea market for the mentioned tea varieties. India’s low production of orthodox
variety of tea which is the preferred type pose a serious challenge to the industry
apart from rising production cost. Tea is also losing out to other beverages such as
coffee. But renewed focus on growing the market apart from incentives led push to
the industry to move up the value chain may ensure its healthy future.
Main problems faced by the tea industry
Among the various constraints that characterize the tea production, some the
problems include poor management practice, old age of tea bushes and other
infrastructural issues. Besides, there are also quality aspects such as lack of
standardisation and quality with respect to packing, pesticide and MRL problems
that affect export of Indian teas.

Foreign trade policy of tea in India

KOLKATA: Tea industry has expressed disappointment over reduction in export
benefits for tea in Foreign Trade Policy 2015 -2020.

Government has replaced Vishesh Krishi Gram Udyog Yojana (VKGUY) with
Merchandise Exports from India Scheme (MEIS) in the new policy which directly
impacts organic tea exporters, Darjeeling Tea Association chairman S S Bagaria
told PTI.

The government instead boosting the sector has made tea exports more
uncompetitive in the global market at a time when unfavourable forex movement
in the Euro had hit hard.

Tea producers body Indian Tea Association (ITA) had also expressed
disappointment.

"Under the MEIS the benefit stand reduced from 5 per cent to 3 per cent in respect
of bulk teas which will adversely impact the competitiveness of tea in global
markets," ITA said in a statement.
Tea had been earlier included in the Vishesh Krishi Gram Udyog Yojana
(VKGUY) and had been enjoying 5 per cent benefit for non-organic and seven per
cent for organic tea covering both bulk and value-added teas.

Indian tea exports continue to be under severe strain. Tea Board's latest data for the
period April-January of 2014-15 recorded a decline of nearly 28 million kgs from
that of the corresponding period of 2013-14.

This decline has largely been in the wake of increased competition from lower cost
tea producers such as east African countries , ITA sources said.

Conclusion
In conclusion I would like to say that the export performance and export value of
tea from India is decreasing every year due to the increasing domestic
consumption.
In order to gain the comparative advantage , Indian tea industry needs
improvement in research facility , introduction of modern technology , processing
facility etc.
References
 https://www.ijbmi.org/papers/Vol(2)8/Version-1/B028109015.pdf
 http://www.teaboard.gov.in/TEABOARDPAGE/NTg
 https://www.asianteaexports.com/
 https://www.indiantradeportal.in/vs.jsp?lang=1&id=0,30,50,203