Indian tea eyes new market in Chile

Move to challenge dominance by Argentina, Sri Lanka; pact to help counter costs

COIMBATORE, 09/02/2008: Tea gardens at the Waterfall Estates in Valparai. Located at an average elevation of 1193 metres (3914 feet) is one among the oldest estates in Anamalai Hills. Photo: K. Ananthan 09-02-2008

India is aiming to break new ground in its tea exports with an entry into Chile where it had recently taken a delegation.

The existing preferential trade agreement with the Latin American country is being seen as a major catalyst in this foray.

‘No Indian presence’

The 21 million-kg Chilean tea market is currently dominated by Argentina and Sri Lanka, with some re-traded teas also being sent from some European countries. Indian presence is virtually non- existent.

“We are pretty optimistic about Chile,” Santosh Sarangi, deputy chairman and CEO, Tea Board India, told

The Hindu .

He said that despite the distance, the Preferential Trade Agreement which gives an 80% margin of preference to tea, will help neutralise the freight costs to Latin America, which were also on a downswing now.

“The Indian Tea Association has been pressing for a delegation to Chile since last year,” said Sujit Patro, secretary, Indian Tea Association, who was also a member of the delegation.

It may be mentioned here that the PTA signed in March 2006 and was expanded in September.

Under the expanded PTA, Chile has offered concessions to India on 1,798 tariff lines with Margin of Preference (MoP) ranging from 30% to 100%. India has offered concessions to Chile on 1,031 tariff lines with MoP ranging from 10% to 100%. Among Latin American countries, Chile is among the leading trading partners of India.

Earlier, the same delegation also participated in a food show in the U.S. This, too, is expected to further prise open the U.S. market. “USA is a big market for teas — over 80 million kg, and growing,” Mr. Sarangi said.

Mr. Patro added that close to 60% of the demand is from the iced tea segment.India has been able to increase its share over the last few years. However the prime attraction lay more in the prices that the market offered. India exported over 14 million kg between April and March 2016-17 to the U.S. at an unit price of ₹276.4, according to official statistics. Between January and May, India’s exports to the U.S. stood at 4.8 million kg against 4.1 million kg a year earlier.