The tea Double-role

Price of Darjeeling variety rose to Rs 1,273 per kg last week due to supply hit leading to influx of duty-free Nepalese tea. Darjeeling tea has turned almost four times costlier in a year, with the average price Rs 1,273 per kg last week, rising to an escalation that traders blamed on the ongoing political unrest in the hills which has hit supplies of the commodity.

Traders said the price rise has also led to an influx of Nepalese tea, which is being sold as Darjeeling tea at a premium price. "Nepalese tea sellers are appointing one dealer or agent here who has a local GST number. Through them they are selling the tea and paying the 5 per cent GST to the agents or dealers here. They are ready to shell out the extra buck as they are getting better prices for their teas in India due to the shortage of Darjeeling tea," said SS Bagaria, former chairman of Darjeeling Tea Association.

As per industry estimates, 2-2.5 million kg of Nepalese tea has entered India. India has a free trade agreement with Nepal, under which Nepalese tea does not incur any import duty in India. Tea from Nepal looks similar to Darjeeling tea and even packers and blenders find it difficult to tell them apart. However, the difference becomes apparent when the tea is brewed. Traders said that although importers bring in tea from Nepal, the tea gets distributed in the system as Darjeeling tea. "This is where it hurts Darjeeling tea," said Bagaria.