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

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 low-priced 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.