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ABSTRACT
The study was conducted for Indian tea based on secondary data pertaining from 1971 to 2016 with the objective to examine the production of bulk tea and value added tea, trends and growth of value added tea and its competitiveness in the world tea market. The data were analysed through tabular as well as quantitative analyses like CAGR, Balassa's Revealed Comparative Advantage and Nominal Protection Coefficient. It was observed that production, export and growth of graded tea increased during the last two decades. Among the value added tea, the export of tea bags was found to increase and the growth of values was higher in the country. Production of tea in Kenya was more advantageous than India and Sri Lanka. South Indian tea had labour and cost advantages while tea produced in North India and Assam gained profit advantages for selling quality tea. Revealed Comparative Advantage indicated that India is still competent in the global tea market and tea is not an efficient export crop as the domestic prices were higher than the world prices. The study concludes that India should go more for graded and value added tea by reducing the costs of production to gain the competitive advantages.
Keywords: Production, export, value added, tea, global competitiveness, India
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Tea as a plantation crop has been considered as a strong nutraceutical beverage in the world. It is produced in more than 45 countries in the world and it plays an important role in the national economy of the country. Its commercial cultivation in India took a spurt since 1951 (Sahewalla and Barthakur, 1996) and it was confined to the tea companies and the industry was almost in a monopolistic competition. India occupies about 21% of area under tea sharing 22.68% of tea production in the world. The industry employs three million people and contributes 3.22% of GDP in India (Talukdar and Sahewalla, 1997). It is also observed that during the recent years export of tea from India has declined due to higher production by different countries, higher import, availability of substitutes, cost advantages due to vintage of modern technology (Chatterjee, 2005; Arya, 2013), high input cost (Uppal, 1994), high domestic consumption, poor value chains, low quality of production...