Journal Press India®

DELHI BUSINESS REVIEW
Vol 8 , Issue 1 , January - June 2007 | Pages: 117-120 | Case Study

The Turnaround of Indian Tea Sector

Author Details ( * ) denotes Corresponding author

1. * Himanshu Dutt, Lecturer, Delhi School of Professional Studies and Research (DSPSR), Affiliated to GGS Indraprastha University, New Delhi, New Delhi, New Delhi, India (himanshudutt@dspsr.in)

TEA Board of India, as a part of turnaround strategy has started promoting and re-positioning the ‘Made In India’ tag in the world tea market as a part of initiatives to augment the Indian tea exports. Chai  Piyo,  Mast  Jiyo (drink tea, enjoy life) is the new USP  to hold back the declining home consumption highlighting tea as healthy refreshing drink. Unlike now, a decade back tea exports from India were doing fairly well in the world tea market, with India as the largest producer and exporter of tea. But the last two years output declined drastically, and the exports dropped. Indeed, the situation is appalling.

While the world tea output & trade has grown multifold, the Indian production and exports have been experiencing the spectral downfall. There have been falling prices, reduced exports and sluggish consumption growth at home. Long gestation period and ROI spread over a time of minimum 5 years, high labour costs accounting for nearly 60% of tea production and, climatic changes critically affecting demand-supply imbalances, have led to these causes. The problem just does not end here.  Surging competition from countries like Kenya, Indonesia, Vietnam & Turkey is also on all time high,  which has further weakened Indian exports without affecting much the world tea market, or missing out on India as a leading source for quality tea.  Primarily, the cause which is making dent in Rs.  10,000 crore-tea industry of India has deep roots in its micro-environment.

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