India's tea export in the scenario of WTO: an analysis of trend and structural shift

Abstract

Once tea was the major source of export earnings. But now global tea production and exports are trailing behind. According to the information from various producing countries and also the Tea Board, the global production so far in 2006 has been nearly 53 million kg lower than the corresponding period of 2005. The biggest reduction occurred in Kenya and next highest loss has occurred in India. We divide our entire period of study (1987-1988 to 2005-2006) into two regimes. Regime-1 and Regime-2 capture the effect of export of tea from India pre- (1987-1988 to 1994-1995) and post- (1995-1996 to 2005-2006) WTO phase. The highest rate of growth of export of tea from India was recorded for USA (10.45%) in the pre-WTO phase and for Poland (12.34%) in the post-WTO phase. Instability indices for export of tea from India are highest for Iran (82.37%) and lowest for USA (13.45%). There are various reasons for the decrease in the export of tea from India. In the light of this development, this paper makes an attempt to provide a detailed analysis of the trends in India's external trade in tea.