India produced about 950 million kg of tea annually and roughly 500 million kg was marketed through the manual auction system. The objective was to bring the quantity under the manual auction system under the e-auction by the end of January 2009. And, over a period of time, the tea that was marketed through private sales should also come under this system. There would be massive training programmes.
Though the e-auction system was not mandatory, incentives would be introduced for people to move in to it. “To stimulate e-auction, we will have incentives so that more people migrate to it,” he said. With the India-ASEAN Free Trade Agreement to be signed next year, the import duty on tea was scheduled to come down from 100 per cent to 45 per cent by 2018. Productivity of the tea sector in Vietnam was higher than India and there could be competition. However, the re-plantation scheme introduced for tea would help improve the productivity of the Indian tea.
The Special Purpose Tea Fund was launched in 2007 and the objective was to replant 11,000 hectares per year for the next 15 years. The country had five lakh hectare under tea. About two lakh hectare would be replanted in 15 years. In the first year, at the national-level 60 per cent of the target was achieved under this scheme. However, in South India only 40 per cent of the target was achieved. The main problems here were the cost norms and labour shortage and “We are trying to meet these two issues,” he said. He also urged the need to produce orthodox tea in a big way. Eight per cent of India’s tea production now was orthodox tea. By the end of the eleventh plan it was proposed to increase this to 120 million kg from the current 85 million - 90 million kg.