Draft tea bill proposes to remove licenses, archaic provisions

The draft tea bill intends to remove archaic or redundant provisions, do away with licences, promote ease of doing business and boost exports from the sector, an official said.

The commerce ministry has proposed to repeal the 68-year old Tea Act, 1953 and introduce a new legislation Tea (Promotion and Development) Bill, 2022.

"The purpose of the new bill is to remove the archaic/redundant provisions which have lost their relevance and make it industry-friendly, doing away with licences and acting as a facilitator," the official said.

It would also suit the need of the industry and the economic scenario currently prevalent in the country.

Explaining the importance of the bill, the official said it recognises small growers and puts emphasis on their training, adoption of new technology, capacity building, value addition; safeguards the interest of tea garden workers; and promotes ease of doing business.

Currently, the central government exercises control over the tea sector through four control orders.

"The control mechanism envisaged under those orders has outlived its utility," the official said, adding the proposed bill will help in boosting exports by emphasising on quality and protecting intellectual property rights of tea of Indian origin.

It also talks about decriminalising minor offences and limiting penal action to a civil penalty for non-compliance.

Further, the bill introduces the doctrine of proportionality, which makes it mandatory for every action of the Tea Board to be in tune with the objectives of the bill to prevent any unfair or unilateral action by the Board.

Archaic provisions of the existing Act include permission to plant tea, export allotment, export quotas and licences, imposition of cess on tea produced in India, and removal of planted tea without permission.

Under an existing provision of the Act, the central government has the power to control the price and distribution of tea, including fixing the minimum and maximum prices.

At present, the Centre also has the power to authorise any person to take over the management control of any garden which remains closed for more than three months without investigation.

"These are reactive steps which have never been successful, rather acted as a detriment to fresh investment," the official added.

The key challenges of the sector include stagnation in export, imbalance in demand and supply leading to falling prices, declining productivity, lack of value addition, and lack of product diversification.

India produces some of the world's finest tea such as Darjeeling, Assam and Nilgiri teas.

India is the second-largest producer of tea in the world with a share of 20 per cent. In 2020, India produced 1,258 million kgs, as against the world production of 6,269 million kgs.

India is the fourth largest tea exporter and shipped 210 million kgs in 2020. Kenya, China and Sri Lanka are the top three exporters.

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