EXFUKT FERHJKMANCE OF INDIAN TEA INDUSTRY UNDER THE NEW ECONOMIC ENVIRONMENT
MAHESH, N., KESHAVA REDDY,T. R., LALITH ACHOTH, AJJAN, N.
Abstract
Tea industry is one of the traditional plantation
based industries and India holds a prime position in production, consumption
and export of tea. Among the various agricultural and allied products, tea alone
contributes 1.5 per cent of the total export earnings. Today, Indian tea industry
is facing all kinds of challenges as a result of new economic scenario that
has emerged due to globalization, liberalization, and privatization. The most
critical factor to meet this challenge will be exporting capability of the country
in a highly competitive environment, when other tea producing countries are
desperately exporting cheaper teas or high value products like instant tea,
tea bags and organic teas.
The export competitiveness of Indian tea was studied by the help of Nominal
Protection Coefficient (NPC) and Domestic Resource Cost (DRC). The results indicated
that under importable hypothesis, the NPC and DRC were 0.71 and 0.66 respectively
and under exportable hypothesis, the NPC and DRC were 0.98 and 0.93 respectively,
implying that Indian tea exports were moderately competitive and also good import
substitute.
In order to study the impact of the WTO on Indian tea exports, the regression
analysis with both intercept and slope dummies was employed and the results
showed that the trend growth path of the rupee values of India's tea exports
was nothing but the continuation of that ofthepre-WTO period and the growth
of India's tea exports in rupee terms did not accelerate during the post-WTO
period. Therefore, in order to sustain the exports, it is necessary to formulate
and implement a time bound action plans to increase the quantity and quality
and exploit the comparative advantage that India enjoys in tea industry.
Keywords:
industry, consumption, export, competitive environment