GUWAHATI, India (IRNA) – India on Saturday announced a Rs. 47 billion economic package to revive the beleaguered tea industry with prices crashing in the weekly auctions and a slump in exports.
"The bulk of the fund would be utilized to upgrade facilities and replanting old plantations with a view to rejuvenating the gardens to produce quality teas," India's Commerce Minister Jairam Ramesh told journalists in Guwahati, the main city in the tea growing northeastern state of Assam.
At least 60 percent of the package has been earmarked for Assam, is considered the heart of India's tea industry with the state accounting for about 55 percent of the country's total annual tea production.
India produced a record high of 928 million kilograms of tea last year compared to 820 million kilograms in 2004.
India is the world's largest tea producer followed by China.
"Unless the aging plantations are rejuvenated, Indian tea would fail to be competitive in the world market," the minister said. "A total of 170,000 hectares of land under tea plantation across India would be covered under the replantation scheme."
India's 1.5 billion dollar tea industry was facing a crisis with prices dropping in the weekly auctions since 1998 and exports plummeting as well.
A kilogram of good quality Assam tea sold at Rs 70 in auctions last week compared to a kilogram of the same beverage selling at about Rs 90 prior to 1998 when the Indian tea industry's slide began.
The slump in prices and exports was largely attributed to cheap and inferior quality teas produced by many new tea-growing countries, thereby pushing premium quality Indian teas to facing stiffer competition in the global market.
India exported 180 million kilograms of tea last year.
"We are now going all out to focus on tapping the tea market in countries like Pakistan, Egypt, and Iran, besides trying to increase the volume of exports to existing markets like the United Kingdom," Ramesh said.
The Indian Tea Board, the apex administrative body, would open offices in the capital cities of Pakistan, Egypt, and Iran to promote the beverage.
"We also are aggressively trying to boost domestic consumption of tea, besides value addition like making organic and green teas to woo more people into drinking the beverage," the minister said.
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