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Hindi-Paki chai-chai

A Pal in Calcutta

The "cup that cheers" helped bring together old enemies. With the winds of change sweeping the world, a high-powered Pakistani delegation, representing the country's tea industry, earlier this month made its maiden visit to Calcutta, where most Indian tea companies headquarters are located. The principal item on the agenda was regularising trade between the two countries, with the immediate aim of importing tea from India.

Pakistan's per capita consumption of tea, at an astonishing one kilogram per annum, is much higher than India's per capita of 630 grams per annum, in spite of the similar living standards.

Vinay Goenka, the chairman of the Indian Tea Association, which received the delegation from across the border, pointed out that Pakistan was one of the largest consumers of tea in the world, consuming 140 million kilograms per year. India needed to develop a sustained market for its produce in Pakistan. With this in mind, the Indian Tea Association is launching a generic promotion programme in Pakistan for Indian tea, keeping in view the consumption patterns in that country. Other imperatives include positioning and promoting tea as a new age beverage with product appeal cutting through all ages and demographic strata, to counter other beverages making inroads into the tea market.

Goenka said there was also a market for 30 million kg more as stocks to ensure availability of tea on a continuous basis, thus giving a total market of 170 kg. "Even if India was able to capture 10 per cent of this market," said Goenka, "it would be a huge 17 million kg, a valuable addition to the overall export kitty."

The common agenda of the eight-member Pakistan Tea Association delegation and the Indian Tea Association includes chalking out a programme to push up tea sales in countries of the South Asian Association for Regional Cooperation. Both Goenka and M M Ispahani, chairman of the Pakistan Tea delegation who headed the delegation, agreed that there was a need to set up a tea auction centre in Pakistan. This will not only impart transparency but also make more tea available to consumers there.

Yet, the greater achievement lies in the Indo-Pak talks. "We have broken the ice at last,", observed Ispahani, referring to the thawing of trade relations between the two countries. The Pakistani delegation made extensive contacts with representatives of the Indian tea industry at various levels and both sides claim a major breakthrough has been achieved with the Pakistani delegation's reported commitment to import about one million kg of Indian tea in addition to the 1.5 million kg it had decided on earlier.

At present, Kenyan tea accounts for the majority of the Pakistani market. Indian Tea, has the advantage of being cheaper with Assam CTC (cut, toasted, curled) tea offering a better alternative for Pakistani tea drinkers. The Pakistani Tea Association felt that Indian tea has the quality and the range suitable for blends in Pakistan. However, the delegation stressed that the major concerns are not simply quality and price, which would be determined by market forces, but rather the accent should be on facilitating trade.

There remains some concern with regard to documentation procedures, communication facilities, and business visa restrictions, particularly for smaller cities which would need to be addressed urgently.

The Pakistani association made particular mention of the sizeable 140 million kg tea market offered by the country and the additional command area of another 60 million kg in neighbouring tea consuming countries.

The delegates perceived the need for activating SAARC and the regional trade bloc as envisioned in South Asian Preferential Trade Agreement towards improving trade flows between India and Pakistan. This could be used to address the high tariff barriers that prevail in Pakistan for tea imports.

Ispahani admitted that the levy on tea imports in Pakistan was as high as 65 per cent and said he would request Islamabad to reduce it. However, the director of an Indian tea company based in Calcutta doubted if this would happen. "It is unlikely because the duty constitutes an important source of revenue for the Pakistani government."