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SPECIAL ARTICLE

Assessing the Impact of the ASEAN-India FTA on the Tea Industry


B H Nagoor, C Nalin Kumar

With the signing of the Free Trade Agreement with the Association of Southeast Asian Nations there are apprehensions that the consequent reduction in import tariffs will adversely affect the Indian tea industry. Apart from dealing with the general concerns on tariff reductions on both sides, this paper integrates factors such as production, yield and consumption of tea within a descriptive framework and draws inferences based on a larger set of indicators. With a huge market for lowpriced tea and a large export price advantage enjoyed by Vietnam, India is in a disadvantageous position in the FTA. Moreover, the chances of expanding exports of Indian tea to ASEAN markets seem limited.

1 Introduction
he Free Trade Agreement (FTA) between India and the 10 members of the Association of Southeast Asian Nations (ASEAN) would eventually eliminate duty on 80% of the goods traded at present. The Most Favoured Nation (MFN) tariff rates currently applied on products such as coffee, palm oil, pepper and tea will be brought down in phases and in the case of tea, the commitment is to reduce tariffs from 100% to 50% by 2019. There are apprehensions that a reduction in import tariffs on tea will adversely affect the Indian tea industry, and through the lenient Rules of Origin, Chinas cheaper tea may enter Indian markets through the ASEAN FTA. Indonesia and Vietnam are major tea exporters among the ASEAN countries, and together, they export around 12% of the worlds tea. It would be advantageous for these countries to explore the huge Indian domestic market under the FTA. In 2008, the share of ASEAN in Indias total tea imports was 21.94%. This represented 2.36% of ASEANs total tea exports and of late, Indias tea imports from ASEAN have been on the rise. Out of the 2,16,000 tonnes of ASEAN countries total tea exports in 2008, India imported 5,100 tonnes. According to UN Comtrade data, during 2009, Indias tea imports from ASEAN increased to 10,350 tonnes, i e, comprising 32.8% of Indias total tea imports. A further reduction in the import tariffs may lead to an increase in tea exports from ASEAN countries to India. Malaysia keeps tea in its exclusion list, while Brunei keeps it in its sensitive list. Most of the traded tea is in the normal track of Indonesia, Myanmar and the Philippines. However, Vietnam keeps it in the highly sensitive list. India keeps tea in the special product category. This paper investigates the emerging concerns of Indias tea industry under the ASEAN-India FTA and the assessment is based on the unit values of exports and imports, growth rates in production and productivity, and the area under tea cultivation in ASEAN and India during 1991-2008. Apart from dealing with the general concerns about tariff reductions on both sides, this paper integrates factors such as production, yield and consumption within the descriptive framework and draws inferences based on a larger set of indicators.

The authors thank the participants and discussant Tharian George for comments on an earlier version of the paper, which was presented at the National Seminar on ASEAN-India FTA and Way Forward, at the Centre for Development Studies, Thiruvananthapuram in February 2010. B H Nagoor (nagoor_bh@yahoo.co.in) is at the Department of Economics, Karnatak University, and C Nalin Kumar (nalin.kumar1@ gmail.com) is at the Indian Institute of Plantation Management, Bangalore.

2 Tea Economies: ASEAN and India


We examine trends and patterns in tea production, productivity and trade in ASEAN countries and India, which are important factors and likely to have an impact on the Indian tea sector. Table 1 (p 113) illustrates the production of tea in India and in four major tea-producing and exporting countries of ASEAN
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during 1991-2008. Tea production in major ASEAN countries has increased by 3.60% annually, which is higher than the annual growth rate of world tea production during 1991-2008. Among the four countries, Vietnam registered the highest growth rate of 10.97% per annum.
Table 1: Tea Production: ASEAN and India (1991-2008) (in 000 tonnes)
Year Thailand Malaysia Indonesia Vietnam Total- 4 India World

1991 1994 1997 2000 2003 2006 2007 2008 CAGR 1991-2008

5.0(0.20) 7.0(0.27) 139.5(5.45) 5.1(0.19) 5.4(0.20) 139.2(5.28) 5.3(0.19) 6.0(0.22) 153.6(5.57)

33.1(1.29) 184.6(7.21) 720.3(28.13) 2,561.1 42.0(1.59) 191.7(7.27) 753.0(28.55) 2,637.4 52.2(1.89) 217.1(7.87) 780.0(28.28) 2,758.0

5.5(0.19) 5.6(0.19) 162.6(5.49) 69.9(2.36) 243.6(8.22) 826.0(27.87) 2,963.6 5.6(0.17) 4.1(0.13) 169.8(5.29) 104.3(3.25) 283.8(8.84) 838.0(26.09) 3,212.5 6.0(0.16) 6.2(0.17) 146.9(4.03) 151.0(4.14) 310.1(8.50) 928.0(25.45) 3,646.5 6.0(0.15) 5.5(0.14) 150.2 (3.86) 164.0 (4.22) 325.8 (8.38) 949.2 (24.42) 3,887.3 6.0(0.13) 5.6(0.12) 150.9(3.19) 174.9(3.69) 337.3(7.12) 805.2(17.00) 4,736.0 1.24 -1.87 0.36 10.97 3.60 1.4 3.06

Figures in parenthesis show percentage share in world production. Source: Estimation based on Food and Agriculture Organisation (FAO) statistics.

Table 2: Tea Yield in Major ASEAN Exporting Countries (kg/hectare)


Year Thailand Malaysia Indonesia Vietnam India World

1991 1994 1997 2000 2003 2006 2008


Source: Same as Table 1.

303 300 294 297 295 300 300

2,117 2,002 2,068 1,879 1,179 1,871 2,011 -2.45

1,474 1,266 1,344 1,341 1,461 1,322 1,411 -0.56

552 596 817 994 1,211 1,229 1,353 5.71

1,711 1,768 1,810 1,686 1,624 1,774 1,699 -0.07

1,120 1,141 1,206 1,243 1,281 1,346 1,688 1.74

CAGR (1991-2008) -0.07

Table 3: Tea Area Harvested in Major ASEAN Exporting Countries and India (in 000 hectares)
Year Thailand Malaysia Indonesia Vietnam Total-4 India World

1991 1996 2001 2008 CAGR (1991 to 2008)

17(0.72) 3(0.14) 95(4.14) 60(2.62) 174.43(7.63) 421(18.42) 2,286 17(0.74) 3(0.13) 115(4.97) 71(3.08) 205.54(8.92) 427(18.54) 2,304 19(0.79) 4(0.14) 115(4.78) 80(3.31) 217.92(9.02) 504(20.87) 2,415 20(0.71) 3(0.10) 107(3.81) 129(4.61) 259.02(9.23) 474(16.89) 2,806 1.31 0.60 1.16 4.97 2.78 1.46 1.30

Figures in parenthesis show percentage share in world area. Source: Same as Table 1.

Though total production of all four ASEAN countries has increased, their share in world tea production has remained stagnant at 7% to 8%. Indias tea production registered a low growth rate of 1.4% per annum during 1991-2008 leading to a decline in its share in world tea production from 28.13% during 1991 to
Table 4: Production, Export and Domestic Consumption of Tea (quantity in 000 tonnes)
Year P Malaysia E P-E* P Thailand E P-E* P

24.42% during 2007 and further to 17% during 2008. According to the Food and Agricultural Organisation (FAO) statistics, 2008 was a bad year for Indias tea production. Given the increasing domestic demand for tea in India (Nagoor 2009), the low growth rate in tea production, the decline in yield (Table 2) and stagnation in the area cultivated (Table 3), it would be fair to assume that India would be importing tea in large quantities. Several studies show that the demand for tea is primarily determined by the income elasticity of demand, as it is price inelastic (Bhattacharya 2004; Dindsa 1981; Nayyar 1976). It is found to have low income elasticity for developed countries and high income elasticity for developing countries. Since 1991, Indias per capita income has increased by manifolds, leading to an increase in the domestic demand for tea. Table 2 presents data on tea productivity in four major ASEAN countries and India, and the difference in tea productivity between the two. The yield difference is calculated thus: (Yield in respective ASEAN country/ Yield in India)*100 100. A negative value would imply that the yield of the respective ASEAN country is lower than that of India; the yield difference expressed as a percentage. Among all the ASEAN countries, Vietnam registered the highest growth rate in yield and in area harvested, i e, 5.71% and 4.97% per annum respectively during 1991-2008. Vietnams tea area harvested as a share of the worlds total has also increased from 2.61% during 1991 to 4.61% during 2008 (Table 3). In other ASEAN countries, yield has declined and area harvested has remained almost stagnant. Though the yield in Vietnam is low when compared to India, it has been steadily improving over time. The data show that among the four major ASEAN tea-producing and exporting countries, only Vietnam has expanded production, productivity and area harvested. Since we are interested in exploring the trade augmentation concerns for India under the ASEAN-India FTA, these trends may not be sufcient to conclude that Vietnam would be a major potential exporter of tea to India. We need further insights in terms of export surplus, export and import prices and trends in domestic demand in the ASEAN countries and India. We look into these aspects in the following section. Availability of export surplus depends upon domestic production and consumption. From the data in Table 1, we notice that except for the year 2008, Indias share in world production of tea was around 25% to 28%, whereas the corresponding gure for Vietnam was around 1% to 4%. Now the question arises: how can a small tea-producing

Vietnam E P-E* P

Indonesia E P-E* P

India E P-E*

1991 1994 1997 2000 2003 2006 2007 2008

7.0 5.4 6.0

0.3 (3.7) 6.7 (96) 0.4 (7.0) 5.0 (93) 0.4 (5.8) 5.7 (9.4)

5.0 0.3 (5.20) 4.7 (95) 5.1 5.3 0.2 (4.6) 4.9 (95) 0.2 (4.1) 5.1 (96)

33.1

8.0 (24.0)

25.1 (76) 18.5 (44) 19.3 (37) 14.3 (20) 45.7 (44) 46.0 (30) NA 3.70

139.5 110.2 (79.0) 29.3 (21) 139.2 153.6 169.8 146.9 150.2 150.9 0.36 84.9 (61.0) 54.3 (39) 66.8 (43.5) 86.8 (56) 88.2 (51.9) 81.6 (48) 95.3 (64.9) 51.5 (35) 83.7 (56) 66.6 (44) NA -0.65 NA 3.47

720.3 215.1 (29.9) 753.0 150.9 (20.1) 780.0 191.5 (24.6) 826.0 200.9 (24.3) 838.0 174.2 (20.8) 928.0 181.3 (19.5) 805.2 1.40 NA 0.43

505.2 (70) 602.1 (80) 588.5 (75) 625.1 (76) 663.8 (79) 746.7 (80) NA 2.07

42.0 23.5 (55.9) 52.2 32.9 (63.0) 69.9 55.6 (79.5) 104.3 58.6 (56.2) 151.0 105.0 (69.5) 174.9 10.97 NA 16.5

5.6 0.6 (11.5) 5.0 (89) 4.1 1.6 (39.5) 2.5 (60) 6.2 1.1 (17.6) 5.5 5.6 NA 13.2 5.1 (82) NA 1.1 (20) 4.4 (80)

5.5 0.6 (10.7) 4.9 (89) 5.6 1.1 (19.1) 4.5 (81) 6.0 1.5 (24.5) 4.5 (75) 6.0 6.0 2.7 (45) 3.3 (55) NA 18.1 NA -1.18

162.6 105.6 (64.9) 57.0 (35)

164.0 114.0 (69.5) 50.0 (30.5)

949.2 193.5 (20.4) 755.8 (79.6)

CAGR (1991-2008) -1.9

-5.04 1.24

(i) P Production, E Exports, * Domestic consumption from production. (ii) Figures in parenthesis show percentage share in production. Source: As specified in Table 1. Economic & Political Weekly EPW

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A negative price difference implies that the export unit value of the respective tea exporting country is lower than the tea import unit value of India. To assess the possibility of Chinas tea exports ooding Indian markets through the lenient Rules of Origin, Chinas export unit value is also given in Table 5. It is evident from Table 5 that the export unit value of Vietnam and Indonesia was lower than the import unit value of India during 2000-07. Also, the export unit value of Thailand was lower than the import unit value of India in 2007. During 2008, around 78% of Indias tea import demand (Table 7) was met by non-ASEAN countries at a higher price. Two questions arise in this context: (1) Despite the export price advantage enjoyed by some of the ASEAN countries vis--vis Indias tea import price, why is only 22% of Indias import demand met by ASEAN (and a mere 5% from Vietnam)? (2) Why is India importing around 78% of its tea imports from other countries at higher prices? Of Indias total tea imports, black tea constitutes around 90%. According to the UN Comtrade data, during 2008, India imported around 46% of black tea from Nepal, 17% from Kenya, 13% from Indonesia and 6% from Vietnam. Thus, India imported around 63% of black tea from Nepal and Kenya even though importing from these countries was more expensive than doing so from Indonesia and Vietnam. This is because India has given preferential market access to Nepal under the Generalised System of Preference (GSP), and India imposes zero tariffs on tea imports, which are used for re-export. In the case of Indonesia and Vietnam, India imposes MFN applied tariffs of 100%, making tea imports Table 5: Export Unit Value of Tea and Import Unit Value of India (US $ per quintal) from these countries relaYear China Price Vietnam Price Indonesia Price Thailand Price Malaysia Price India EUV Difference EUV Difference EUV Difference EUV Difference EUV Difference IUV tively expensive. Under the 2000 157.9 19.68 125.2 -5.15 106.2 -19.54 151.6 14.89 213.6 61.85 132.0 ASEAN-India FTA , India kept 2001 142.1 -0.83 115.5 -19.41 100.2 -30.09 155.0 8.18 144.8 1.05 143.3 most of the black tea1 under 2002 136.5 26.86 106.5 -1.00 103.2 -4.03 143.5 33.36 165.3 53.63 107.6 the special products cate2003 146.6 15.50 99.6 -21.51 108.7 -14.41 137.0 7.94 188.8 48.74 127.0 gory. Applied MFN tariff rates 2004 160.5 59.15 93.0 -7.82 117.7 16.70 231.8 129.85 234.6 132.58 100.9 on special products will be 2005 173.1 33.30 110.2 -15.15 118.8 -8.51 178.3 37.35 197.7 52.29 129.8 brought down in a phased 2006 195.1 64.17 105.2 -11.50 141.1 18.72 175.3 47.54 223.7 88.26 118.8 2007 212.3 35.65 114.8 -26.68 151.3 -3.31 148.8 -4.92 258.4 65.05 156.5 manner. In case of most of the EUV- Export Unit Value. IUV - Import Unit Value. black tea, it will be brought Source: Same as Table 1. down from 100% to 50% by T hailand and Malaysia are small players in world tea exports, 2019. This will make tea from Indonesia and even more so from together exporting around 4,000 tonnes of tea in the world Vietnam (since the latter has a larger negative price difference) during 2007, representing around 2% of ASEANs total tea relatively cheap. exports (Table 7). Our analysis shows that among all the ASEAN An analysis of individual countries shows that Vietnam regiscountries, Vietnam is emerging as a major tea exporter. tered high compound annual growth rates in exports, yield, production, and area expansion in tea. Indonesia experienced 3 Emerging Trade Augmentation Concerns for India an export price advantage of 3.31% over Indias import price of Along with export surplus, price of the exportable product of the Table 6: Domestic Price of Tea and Indias Import Unit Value of Tea from Vietnam exporting country and price and demand of the importable and Indonesia (Price in Rs per quintal) India IUV of Tea Price Difference India IUV of Tea Price Difference product of the importing country are also important. This is Year All India Domestic Tea Price from Vietnam from Indonesia shown in Table 5. The assessment is based on the unit values of 2004 6,454 3,490 -46 5,350 -17.1 exports and imports of exporting and importing countries 2006 6,601 3,507 -47 6,850 3.8 respectively. The difference between the export unit value (EUV) 2008 8,699 5,908 -32 6,485 -25.4 of four major ASEAN countries and import unit value (IUV) of (i) India IUV Indias import unit value represents the unit price at which India imports from the respective country. (ii) The dollar import unit value is converted into Indian rupees by India is calculated thus: multiplying with Indian exchange rates in respective years. (iii) Price difference = (Indias Import Price difference = (EUV of respective exporting country/ Unit Value of Tea from the respective country/Domestic price of Indian tea) *100 -100 . Source: (i) All India domestic tea price is taken from Tea Board of India Statistics. (ii) Import Unit Value (IUV) of Tea from Indonesia and Vietnam is estimated from UN Comtrade Database. IUV of India)*100 100. country such as Vietnam, which is nowhere even close to India in terms of production, increase its exports to India? Here, it is important to note that what matters is not how much a country produces in the world, but its ability to meet its domestic requirement from its production at competitive prices. In India, the growth rate of domestic consumption from production (2.07% per annum) is higher than its growth rate of production (1.40% per annum). Additional production is lagging behind additional domestic demand, leading to increase in imports of tea (Table 7, p 115) and stagnation in exports during 1991-2007 (Table 4, p 113). Also, yield and area under cultivation of tea in India has remained almost stagnant (Tables 2 and 3). In case of Vietnam, the growth rate of tea production (10.97% per annum) is much higher than its growth rate of domestic consumption from production (3.70% per annum), leading to an increase in exportable surplus. During 1991-2007, Vietnam registered high export growth rate (16.5% per annum), leading to increase in its share of exports in its domestic production from 24% in 1991 to 69.5% in 2007 (Table 4). Productivity of tea and area under tea cultivation is also on the rise. In the case of Indonesia another major tea exporting country within ASEAN, with increase in the domestic tea consumption, surplus for exports has declined (Table 4). Tea productivity has been declining and area under tea cultivation is almost stagnant. In case of Thailand and Malaysia, with the decline in domestic consumption for tea from production, these countries registered higher export growth rate during 1991 to 2007. However,

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represents the price at which a country imports, and includes transportation and insurance costs, but excludes tariffs.2 A To India To World To India To World To India To World To India To World To India To World comparison of import price and 2000 NA 0.65 0.01 0.59 2.46 55.66 6.01 105.58 NA NA NA (2.46) (4.41) (5.69) domestic price reects the com2005 0.17 1.16 0.01* 1.47* 0.80 32.79 2.17 102.29 3.14 137.72 18.65 16.86 parative price advantage for re(14.95) (0.25) (2.44) (2.12) (2.28) spective exporting countries. 2008 0.02 1.61 0.01 2.36 1.26# 115.73# 3.80 96.21 5.09 215.91 23.20 21.94 This is captured in Table 6 (p 114), (1.28) (0.28) (1.09) (3.95) (2.36) by drawing upon the metho2009 10.35 31.56 dology used in Table 5 for the Figures in parenthesis show Indias import share in total ASEAN countries tea exports. * For the year 2006, # For the year 2007. price difference. The results of Source: Estimation based on UN Comtrade Database, viewed on 28 January 2010 (http://comtrade.un.org/db/). Table 6 support our argument Table 8: Tea Imports of ASEAN Countries (Quantity in 000 tonnes) that Vietnam and Indonesia Year Indonesia Malaysia Cambodia Singapore Other Asian Total ASEAN World ASEAN % Share ASEAN % Share have an export price advantage Countries Imports Imports in World Import in Indias Total over India. From Table 6, we Tea Exports notice that during 2008, import 1991 0.71 5.11 NA 7.49 0.92 14.23 1,137.35 1.25 7.18 unit values of Vietnamese tea 1994 0.45 7.36 NA 7.06 1.18 16.06 1,150.51 1.40 10.48 were lower by 32% compared to 1997 2.82 6.70 0.07 5.56 1.40 16.55 1,241.68 1.33 11.96 our domestic price of tea. The ex2000 2.63 9.42 0.04 6.20 2.01 20.29 1,343.77 1.51 11.43 port price advantage of Vietnam 2003 4.00 12.67 0.04 3.48 3.05 23.23 1,385.70 1.68 12.79 was 46% and 47% during 2004 2006 5.29 14.79 7.13 4.58 2.77 34.56 1,470.64 2.35 21.72 and 2006, respectively. Indone2007 8.70 15.66 6.67 4.46 3.62 39.11 1,463.74 2.67 21.57 sia too had an export price adCAGR 22.07 7.14 48.00 -4.35 10.67 5.84 1.70 vantage of 17.1% and 25.4% durData not available for Vietnam. Source: As specified in Table 1. ing 2004 and 2008, respectively, Table 9: Difference between Export Unit Value of India and Import Unit Value of ASEAN Countries though in 2006 it experienced Year Indonesia Malaysia Thailand Philippines Singapore Brunei Laos Cambodia Myanmar export price disadvantage. 2000 83.0 104.6 -17.8 -22.1 -23.0 24.6 -46.3 296.7 296.7 In 2008, ASEAN exported 2001 67.4 106.1 -15.1 0.3 -32.9 -52.4 -27.6 71.8 71.8 2,15,910 tonnes of tea to the 2002 73.6 53.1 -33.6 -28.6 -41.3 -65.3 NA 48.2 48.2 world, representing 12% of world 2003 99.5 79.7 -31.4 -36.3 -42.4 -58.7 NA 50.6 50.6 tea exports. At present, the quan2004 53.4 83.0 75.9 -18.5 -38.7 -55.2 294.0 48.2 48.2 tum of ASEANs tea exports to 2005 79.0 82.5 48.6 -56.2 -33.8 -55.9 283.5 40.1 40.1 India is very low. In 2008, only 2006 36.7 63.5 -3.1 -59.0 -42.1 -44.7 171.1 62.6 62.6 22% of Indias import demand 2007 97.9 56.4 15.3 -60.1 -39.4 -29.0 115.4 68.5 68.5 was met by ASEAN countries. (i) Price difference = (EUV of India/IUV of respective ASEAN importing country) *100 -100. (ii) Data for Vietnam are not available in the FAO source. Given declining or stagnant tea Source: As specified in Table 1. production, yield and area extea during 2007. Despite this export price advantage, given the pansion in recent years, there has been continuous increase in stagnation in tea production and area harvested, decline in the domestic demand for tea. Our analysis shows that ASEAN tea productivity and export surplus, increase in domestic demand for tea and volatility in its export price, it may not take advantage For the Attention of Subscribers and of FTA with India. Nevertheless, Indonesia exported 83,660 Subscription Agencies Outside India tonnes of tea to the world, representing 5% of world tea exports. Thailand exports very small quantities of tea. Its share in world It has come to our notice that a large number of subscriptions to tea exports is 0.16%, i e, 2,720 tonnes. Though Thailand had an the EPW from outside the country together with the subscription payments sent to supposed subscription agents in India have not export price advantage of 4.92% over India in 2007, for the rest been forwarded to us. of the years, tea export price was not competitive compared to Indias tea import price. The case of Chinese tea entering the We wish to point out to subscribers and subscription agencies outside India that all foreign subscriptions, together with the appropriate Indian market through ASEAN countries seems to be weak, as remittances, must be forwarded to us and not to unauthorised third China has a large price disadvantage to export its tea to India parties in India. (Table 5). Our analysis shows that among all the major teaWe take no responsibility whatsoever in respect of subscriptions exporting countries of ASEAN, only Vietnam has a huge opportunot registered with us. nity to enhance its tea exports to India. MANAGER We also look at domestic price of tea and Indias import unit
Table 7: ASEAN Countries Tea Exports to India and World (Quantity in 000 tonnes)
Year Malaysia Thailand Vietnam Indonesia Total ASEAN Export Indias Total Import Indias Imports from ASEAN as a % of Its Total Imports from the World

value of tea from Vietnam and Indonesia. Import unit value


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exporting countries, particularly Vietnam, have a huge tea export market in India under the FTA . During 2007, Vietnam met 5.43% of Indias tea import demand. The share of India in Vietnams total tea exports is 1.09%. Thus, there is a possible tea trade creation between India and Vietnam. We now illustrate Indias possibilities of expanding its tea exports in ASEAN markets. During 2007, ASEAN countries imported 39,110 tonnes representing 2.67% of world tea imports (Table 8, p 115). Table 9 (p 115) shows that India has an export price advantage in exporting tea to the markets of Singapore, Philippines and Brunei. However, these are very small markets for Indias exports. During 2007, Singapore, the Philippines and Brunei together imported 5,220 tonnes of tea from the world. Even if this entire demand were met by India, it would constitute a mere 2.7% of Indias total tea exports. In other ASEAN countries India has a disadvantage in exporting tea. Thus, the possibility to enhance Indias tea export in ASEAN countries seems very weak.
Notes
1 According to HS 6-digit classication, black tea is classied into two categories, depending on the weight of the package. During 2009, the category that comprised 94% of the total black tea imports has been kept in the special product list, which comes under reduction commitment. The other category is in the exclusion list. In our study we have calculated IUV by taking the ratio of import value and quantity (IUV = Import Value/Import Quantity).

4 Conclusions
From the analysis, we nd that with regard to tea, India is in a disadvantageous position in the ASEAN FTA. India has a huge market for low-priced tea and its domestic tea market is expanding. Given that Indias tea production and area under tea cultivation is almost stagnant, it is likely to import tea in large quantities. If protection is not given, there may be a surge of tea imports in the Indian market. ASEAN nations, especially Vietnam and Indonesia are potential sources for low-priced tea in the world. Vietnam has the greatest export price advantage in the Indian domestic tea market. India has an export price advantage in exporting tea to the markets of Singapore, the Philippines and Brunei. However, these are very small tea importing countries. At present Indias tea export to these countries is very low and other ASEAN countries are exporting to them within ASEAN FTA , therefore, the chances for India to expand its tea exports to ASEAN are limited.
Countries of the World, IGIDR Proceedings/Project Reports Series pp 062-21, available at http://www. igidr.ac.in/pdf/publication/PP-062-21.pdf Nayyar, Deepak (1976): Indias Export and Export Policies in the 1960s (London: Cambridge University Press). Tea Statistics (various years): Tea Board of India, available at http://www.teaboard.gov.in/inner2.asp? param_ link_id=410, accessed on 28 February 2010. United Nations Comtrade (various years): Commodity Trade Statistics Database, available at http://comtrade.un.org/db/, United Nations Statistics Division, accessed on 28 February 2010.

References
Bhattacharya, B (2004): Agricultural Exports (New Delhi: Academic Foundation). Dindsa, K S (1981): Indias Export Performance Some Policy Implications (New Delhi: Intellectual Publishing House). Food and Agriculture Organisation (2010): FAO Stat, Rome, available at www.fao.org http://www. fao.org/corp/statistics/en/, accessed on 28 February 2010. Nagoor, B H (2009): Performance of Indias Tea Exports: A Comparative Study of Major Tea Exporting

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