Tea industry seeks higher RoDTEP rates to make exports competitive

The tea industry has sought higher rates under the RoDTEP scheme to make exports more competitive in the overseas markets.

Leading industry body Indian Tea Association (ITA), in its pre-budget memorandum, said that the present RoDTEP rate for bulk tea is 1.7 per cent (free on board) subject to a cap of Rs 6.70 per kilogram.

The association urged the government to increase the reward base rate under the Remission of Duties and Taxes on Exported Products (RoDTEP) for black tea in bulk to remain competitive in the international markets.

The RoDTEP scheme ensures that exporters receive refunds on embedded taxes and duties that were previously non-recoverable.

Another industry body Tea Association of India (TAI), in its pre-budget proposal submitted to the government, said the RoDTEP rate for tea should be higher than the earlier MEIS (merchandise exports incentive scheme) of five per cent to enable Indian tea to retain its competitiveness in the global market.

Since its inception in January 2021, the RoDTEP scheme has already provided support amounting to Rs 42,000 crores to more than 10,500 export items, an official statement said in March.

The association has also sought for imposition of an anti-dumping duty on imports of Nepal tea.

The TAI said that this measure would prevent the dumping of cheap and duty-free tea from Nepal and boost exports of genuine Darjeeling tea.

Such a measure would also thwart the passing off of Nepalese tea as a geographical indication (GI) tag product.

The ITA said that the government should exempt tea from levy on TDS on cash withdrawals due to a lack of banking infrastructure in the tea-growing areas in the country.

The association has sought concessional customs duty on imports of specified machinery required for tea production.

In its pre-budget memorandum, ITA said that the modernisation of the plantation sector is dependent on the upgradation of machinery which is not available within the country.

The government should grant a concessional import tariff on specified tea machinery items, the industry body said.

The association also said in the memorandum that the government should increase fund allocation for tea development and promotion scheme for the period 2021-26.

According to ITA, the Tea Board's new promotion and development scheme for the 2021-26 period has discontinued plantation development and factory upgradation incentives for big growers.

The "lack of financial support" from the government has "incapacitated the tea producers' ability to bring about improvement in quality and productivity leading to long-term impact on viability", the association said.

The ITA also sought that the fund allocation for the period 2021-26 be enhanced to enable restoration and implementation of the erstwhile incentive schemes for big growers.