Guwahati, Feb 11: In the wake of signing of the India–EU Trade and Investment Agreement, also known as Free Trade Agreement (FTA), the Indian tea industry sees hopes for significant expansion of its business in the European Union (EU) market and enhancing competitiveness, provided complementary domestic support is in place in the country from the government agencies concerned.
“To fully leverage the benefits of the FTA, exporters will require support for certification, testing, traceability systems, and capacity building, particularly for small and medium enterprises. Emerging EU regulations on sustainability, environmental compliance, and human rights due diligence may increase compliance costs, making domestic support even more critical.
“Early stakeholder consultations and alignment of domestic schemes with FTA commitments will be essential to ensure that Indian exporters, including tea producers, are well-prepared to benefit from the India–EU FTA,” states Ms. Shailja Mehta, President Tea Association of India (TAI).
The TAI President’s comments is very relevant given that EU regulations on Maximum Residue Limits (MRLs), food safety, traceability, packaging, and labelling continue to pose challenges for India tea exporters.
So, the industry looks forward to provisions in the FTA ensuring regulatory transparency, science-based standards, and timely consultations before the introduction of new measures.
Under the FTA, goods exported to the EU must undergo adequate processing or manufacturing to obtain originating status and preferential access. The product-specific rules (PSRs) are designed to be balanced and aligned with existing supply chains, ensuring substantial processing in the parties while allowing flexibility to source inputs from global value chains.
India exports approximately 19–21 million kilograms of tea annually to EU countries. Germany and Poland together account for a substantial share of Indian tea exported to the EU, underscoring their importance as key entry and redistribution hubs within the European market.
The FTA is expected to enhance India’s competitiveness in global markets across key sectors such as agriculture, processed foods, and tea. While duty rates on black tea and most green tea categories were already nil, the latest FTA is expected to eliminate duties on green tea imports of less than 3 kgs, further strengthening India’s export potential.
