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Govt. to consider reducing import duty for Tea & Coffee industry:  Budget 2016

In a bid to increase both domestic production and exports, the central government may consider reducing import duty of processing machinery for Tea and Coffee industry.  The Tea and Coffee industry has long demanded for duties on imports of machineries for tea and coffee processing to be reduced.

  • The import duties on coffee processing machines are nearly 30% whereas for the tea processing it is only 10%. The Ministry of Commerce and Industry’s Finance department has in the thought process to consider the industry’s demand.
  • The number of tea and coffee manufactures in the country has said to be decreasing and there lies a huge need for modern technology to move up to the value chain. India mainly imports the said machines from countries namely Germany, China and Japan.
  • India’s total coffee production in the year 2014-2015 was around 3.3 lakh tonnes which was 4% of global production. Although India’s exports in the same year were around 2.8 lakh tonnes, around 4.2% of global exports. Simultaneously India’s tea production for the year 2014-2015 has been 12,000 million kg which was around 24% of the world’s production. For exports, India stood with 200 million kg of tea and its share in the global exports was 11%. The main competitor in the coffee industry is Brazil whereas for the coffee sector, the main competitors are China, Kenya, Sri Lanka, Vietnam and Indonesia.
  • The prime demand of this industry is that if the import duty on processing machinery has been reduced then it thus would help in increasing production as well as total exports from India.

(Source: Money Control)

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