India to set up $1b fund to replant tea estates
The federal government will contribute 1 billion rupees to the fund, which will be spent over a period of 15 years. The remaining amount will be raised from banks and other financial institutions.
"The special purpose tea fund is a fund for the replantation and rejuvenation of the tea industry," Jairam Ramesh told reporters on the sidelines of a planters' conference in the southern Indian hill town of Coonoor. "All plantations which are more than 40 years old will become eligible for the replantation subsidy. This will constitute a very major milestone in making the Indian tea industry cross the next productivity barrier."
Roughly 200,000 hectares of more than 521,000 hectares under tea will be covered under the replantation drive.
Tea growing regions in Assam will get 50 percent of the money, while those in West Bengal and southern states will get 25 percent each.
Trade officials said the package would provide major relief to small growers who have been unable to afford widespread replanting.
The minister said the government was negotiating with banks to finalize lending terms and details would be announced shortly.
Tea exports from India in the January-July period are estimated at 98.1 million kg, up from 95.7 million kg last year, the body reported earlier.
India, which exports about 200 million kg of black tea and 3 to 4 million kg of green tea to 65 countries, saw its exports drop in the first quarter of 2006 due to bad weather and lower output.
The country's tea industry faces a tough challenge from Sri Lankan and Kenyan producers in major export markets like Russia.
Ramesh said tea planters would have to boost marketing to tap opportunities in new markets like Pakistan, Iran and Egypt.
The government will provide financial and infrastructure support to boost marketing initiatives.