India is working on a strategy to fill the supply gaps that have opened up in the global tea market following the sudden economic crisis that has engulfed Sri Lanka, the world’s largest tea exporter.
The strategy includes working out alternative payment mechanisms for trade with sanctions-hit Russia and Iran, marketing and brand promotion activities in Europe and North America, and supporting exporters facing high freight costs.
The island nation has been left grappling with a sharp decline in tea production amid 12-14 hour power cuts, as it announced a default on all its external debt of $51 billion.
The department of commerce and the directorate general of foreign trade are exploring ways to address the bottlenecks faced by tea exporters.
“India’s orthodox (or loose-leaf) tea production is enough to cater to the gaps left by Sri Lanka. We are working out ways to fill in the supply gaps left by Sri Lanka. We are talking to exporters and trying to address the bottlenecks related to payment settlement issues with Iran, support amid skyrocketing freight charges, and brand promotion in newer markets. If these are addressed, Indian exporters can go full throttle," said a tea board official.
Tea exporters said India is well-positioned to capture markets in countries that import orthodox tea. India could strengthen its footprint in Iran and the Sri Lankan economic crisis could open up newer markets such as Turkey, Iraq, the US, China and Canada.