Crisis in Darjeeling tea industry

(MainsGS1:factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world (including India)

Context:

• Indian tea had not been able to establish itself globally and one of its key brands, Darjeeling Tea, was under acute stress.

Saving Darjeeling Tea:

• Darjeeling Tea, called the ‘Champagne of Teas’, was the first Indian product to get the GI (Geographical Identification) tag in 2004 for its distinctive aroma and flavour. 
• About 87 gardens in Darjeeling which employ about 55,000 workers produce approximately 7 million kg of tea, most of which is exported. 
• Over the past few months a lot of gardens in the hills have changed hands because the owners were reeling under higher costs of production and other issues. 
• Thus, the Tea Board of India said it had sought a special financial package of ₹1,000 crore from the Centre for the tea Industry over five years.

Threat from Nepal:

• A report by the Parliamentary Standing Committee of the Ministry of Commerce, tabled in Parliament in June, said “unhampered and easy influx of substandard tea from neighboring countries, especially Nepal” is jeopardizing the tea industry of India. 
• The document pointed out that inferior quality tea from Nepal was being imported, and then sold and re-exported as premium Darjeeling Tea. 
• Under the Revised Treaty of Trade between the Governments of India and Nepal in October 2009, both parties had agreed to exempt from basic customs duty, as well as from quantitative restrictions, the import of mutually agreed primary products.
• Industry experts said Nepal, which shares similar climatic conditions and terrain, produces tea at a lower price because of less input costs, particularly labour, and fewer quality checks. 
• Even though the quality is no match, yet the tea from Nepal posed a serious challenge to Darjeeling Tea.

Impact of climate change:

• Tea production in Darjeeling which used to be around 10-12 million kg a decade back now stands at 6.87 mkg (2021). 
• Industry experts say the decline in production is due to multiple factors, which include climate change, declining yields and high absenteeism among workers. 
• Because of the hilly terrain of Darjeeling there is no land left for expansion of tea gardens and the tea bushes are older than other parts of the country thus uprooting and planting them is both time and cost intensive.

Way forward:

• The Standing Committee of Parliament has recommended that the Government “review and revisit the Indo-Nepal Treaty for incorporating stringent requirements for certificate of origin on tea imports from Nepal.” 
• The committee suggested that Small Tea Growers (STGs) should also be recognised as GI-registered producers on a par with the 87 tea estates which produce Darjeeling Tea to ensure better price premium. 
• Industry experts called for raising the domestic consumption of tea in India, particularly when exports are not picking up as the per capita tea consumption in the country remains at 850 grams and is less than neighboring countries.