Indian tea growers push 'quality'

"Never mind the price, check the quality" is the catchphrase of India's tea exporters as they try to reinvigorate their industry.

A fall in exports last year prompted India's growers to consider a different marketing strategy, to focus on the quality of teas like Assam.

"Quality teas will always be an advert for India," DM Jain, president of the Tea Association of India, told the BBC's World Business Report.

"India has to produce the quality to regain the name in the market, which is what the Indian exporters are trying to do."

India is the world's biggest producer of tea but the competition is fierce, with Kenya, Vietnam and Indonesia selling at cheaper prices, and China boosting exports.

"China can be more competitive with cheaper rates and they are the main competition for Indian export market," Mr Jain said.

Government aid

India's beleaguered tea growers were thrown a lifeline last week by Finance Minister Yashwant Sinha's Budget.

He offered growers a 50% cut in excise duty and raised the import duty on foreign teas, which are mostly re-exported, by 30% to 100%.

While Mr Sinha's measures gave the industry some hope, some felt it too little too late.

"Obviously it's a move in the right direction, but whether it will be adequate to help tide the industry over the current difficult situation remains to be seen," Mr Jain said.

Tea strained

The falling price of tea has meant hard times for Indian growers.

At the beginning of 2002, a kilogram of top quality Assam tea was selling for at least 12 rupees (US$0.25) less at weekly auctions than three years ago.

Meanwhile, tea production costs have shot up with rises in fertilizer prices and the wages of plantation workers.

India's tea industry produces about 30% of global output, and employs 1 million workers.

The country's production has dropped from 870 million kilograms in 1998 to 823 million kilograms last year.

Assam accounted for more than half of total produced.