Date:05/04/2005 URL: http://www.thehindubusinessline.com/2005/04/05/stories/2005040502200900.htm

Back 50% value addition must on tea exports by EOUs, SEZs

K.R. Srivats

New Delhi , April 4

THE Directorate General of Foreign Trade (DGFT) has clamped a minimum 50 per cent value addition norm on tea exported by EOUs (export-oriented units) and units in the special economic zones (SEZs).

This move forms part of a host of procedural measures taken by the Government to safeguard the quality of Indian tea exports.

Till now, such units were required to adhere to only "positive" value addition. On the other hand, advance licence holders were required to fulfil 100 per cent value addition.

The DGFT has also stipulated that import of tea would have to comply with quality and packaging requirements laid down under the Prevention of Food Adulteration Act 1994, before clearance of consignments at Customs.

The Government has held that all imported tea has to be used within six months from the date of import.

As regards export obligation on tea, the DGFT has stipulated that the period of fulfilment of export obligation would commence from the date of import of the first consignment and should be fulfilled within six months. This will be applicable to both advance licences and EOUs.

Further, tea exporters who are required to submit a certificate of origin (non-preferential) will now have to apply to the Tea Board or any inspection agency authorised by the Tea Board.

A senior Federation of Indian Export Organisation official said these measures may have been taken in the wake of certain instances of inferior quality tea being imported and blended with domestic tea for export as Indian tea.

The move to insist on minimum 50 per cent value addition for EOUs/SEZ units may encourage domestic procurement by these units, the official said. These measures of the DGFT are also expected to tackle any "unhealthy practices" undertaken by tea exporters.