Challenges Facing Darjeeling Tea Industry
Darjeeling tea, known as the "Champagne of teas," is experiencing significant challenges due to falling production, competition from cheaper imports, and political issues. The West Bengal government is seeking to protect this industry by invoking a safeguard clause in the India-Nepal trade treaty.
India-Nepal Trade Treaty and Safeguard Clause
- The safeguard clause can be activated if imports threaten domestic industries, in line with the WTO Safeguard Agreement.
- There are concerns about the diplomatic impact of taking measures against Nepal, a key neighbor.
Competition from Nepalese Tea
- Nepalese tea imports, which have duty-free access to India, surpass Darjeeling's production, affecting the domestic market.
- The Indian Tea Association (ITA) highlights the need for a level playing field to protect the GI-tagged Darjeeling tea.
Impact of the Gorkhaland Movement
- The Gorkhaland movement has contributed to cultural and economic challenges, affecting worker productivity and industry stability.
- In 2017, a 104-day shutdown during peak season resulted in a production drop to 3.21 million kg, over 60% below the previous year.
West Bengal Government Initiatives
- Chief Minister Mamata Banerjee announced a testing lab to detect mixing of Darjeeling tea with inferior varieties.
- Banerjee criticized the duty-free benefits for Nepalese tea compared to a 40% tariff on Indian tea.
Industry Stakeholder Actions
- Discussions among industry stakeholders have led to proposals for a bailout package of ₹41 crore per year.
- Consideration of a minimum import price indexed to Darjeeling tea production costs has been suggested as a potential solution.
Proposed Solutions and Challenges
- Anshuman Kanoria from the Indian Tea Exporters Association recommends ensuring Nepalese tea is sold in consumer packets, complying with Indian FSSAI laws.
- Challenges remain, with several tea gardens closing due to financial losses.
The Darjeeling tea industry is in a precarious situation, struggling with both external and internal pressures. The solutions proposed, including policy changes and financial support, aim to stabilize and sustain the industry amid these challenges.