The Tea Board of India modified its prior notification on October 18 that had outright prohibited the mixing of Indian teas with geographical indications (GI) tags with imported teas.
After the Tea Board of India overturned its November 2021 decree and reversed the ban on blending Indian teas with those imported, producers of Darjeeling tea breathed a sigh of relief.
The Tea Board of India modified its prior notification on October 18 that had outright prohibited the mixing of Indian teas with geographical indications (GI) tags with imported teas.
Top Indian tea consumers had ceased purchasing Darjeeling tea as a result of the earlier announcement, which had a significant effect. Because the pure Darjeeling tea is expensive, they used to purchase the Darjeeling tea and blend it with other varieties to sell it at a lower price in the Indian market.
According to the Darjeeling tea planters, the restriction had put them in a dire situation because more than 12% of the Darjeeling tea, which had previously been purchased by a single corporate customer before the ban was imposed on the blending, had to be sold at a discount price. The demand for high quality Darjeeling tea decreased both in the auction and on the open market, resulting in a price decline while the cost of production skyrocketed as a result of rising labour and coal prices.
The production of Darjeeling tea is approximately 7 million kg per year, and 3 to 4 million kg are exported, according to Rishi Saria, director of Gopaldhara and Rohini tea estates. In essence, between 3 and 4 million kilogrammes must be sold inside of India. The domestic market’s demand has decreased as consumers have turned to Nepal tea as a substitute.
The main purchasers of blend teas began sourcing it from Sri Lanka and Nepal when the ban on combining Indian teas with GI tags with imported ones was implemented.
The livelihood of Darjeeling tea planters is impacted by Nepal Tea, which is produced under climatic conditions and topographic conditions similar to those of the Darjeeling Hills at a lower cost.
As of Tuesday, dealers may mix Darjeeling tea with any other varietals, including Nepal tea, in their bags as long as the finished product does not assert that it is an unique good covered by the GI designation. The majority of Darjeeling tea growers believe this will have an immediate favourable effect and support the Darjeeling tea business.
“A major corporate house used to blend Darjeeling tea with Nepal tea. But they were not violating the GI Tag as they never claimed they were selling pure Darjeeling tea. I think the government wanted to protect Darjeeling tea, but unfortunately the November notification dealt a severe blow to the Darjeeling tea industry. It stopped the largest buyer of Darjeeling tea, from buying for a non-Darjeeling package. This resulted in the fall in the almost 12% sale of Darjeeling Tea and the prices of Darjeeling Tea crashed despite a huge shoot in the cost of production.”- Anshsuman Kanoria’s statement.
“To protect Darjeeling Tea, we need an increase in demand and not a fall. Of course, we must protect GI and we must take action on free entry of Nepal tea into India, but this should not be at the cost of penalising genuine buyers who are actually supporting Darjeeling and who are not violating GI,” he added.
We had been struggling for months, and now we are witnessing the outcome, according to Satish Mitruka, managing director of Nurbong Tea Estate and a member of the Darjeeling Tea Association. The price of Darjeeling tea significantly decreased after the major buyer decided not to participate in auction and private sales of Darjeeling tea as a result of the November 2021 notification. Assam conventional teas that were not organic were costing more than Darjeeling organic tea. The Darjeeling tea industry was on the point of collapse as a result of this.
The average auction and private price for Darjeeling tea was above 600 in 2021, and it dropped to little about 400 in 2022. When the daily wage was 202 in 2021, the cost of production ranged from 550 to 600, but now that the wage has climbed to 232 and the price of coal has increased, the cost of production has grown by almost 100, according to Mitruka.