The tea industry has other plans up its sleeve. Neither is likely to cannibalise its own brands. Despite receiving a temporary relief in the form of doubling of import duty to 70 per cent, what worries the industry is imports of bulk teas from Vietnam, Indonesia, and China, which is switching from green teas to black teas. Though large branded segment players like Tata Tea have gardens abroad from where they source their teas, the ITA is worried that others may start importing cheap tea for sale in the domestic market. This will depress demand for Indian tea and push down prices, already low due to a glut.
Manufacturers are, therefore, reworking strategies.
The Apeejay Surrendra group, for example, plans to build up a presence in branded teas as well as form trading alliances with global tea majors. The small scale sector could certainly do with this kind of breather. Constrained by lack of economies of scale and low investment limits, the sector will be unable to compete with efficiently produced foreign goods. The industry has already been laid low by the influx of cheap toys from China. Larger players are managing to survive.