India’s Tea Export in the Scenario of Trade Openness: An Analysis of Trend and Structural Break

Abstract

India is one of the largest tea producers and consumers in the world. Around 70% of Indian tea is consumed by domestic consumers. The world famous Darjeeling and Assam tea are India’s pride. Once India was the top exporter of tea in the global market, currently, it is lagging behind China, Kenya, and Sri Lanka. In the global arena, Indian tea is facing stiff competition from China, Kenya, and Sri Lanka. With this backdrop, the present study aims to investigate twin objectives. First, the changing growth pattern of India’s tea export is investigated. Along with this, the impacts of trade openness on India’s tea export are also scrutinized. The entire study is conducted based on the secondary data, compiled from the various issues of Handbook of Statistics on Indian Economy published by Reserve Bank of India. The data are compiled for the period 1987–1988 to 2018–2019. The investigation of the first objective is facilitated by the Poirer’s Spline function approach. On the contrary, for the exploration of the second objective, we have calculated the “trade openness index.” The study concludes that initially with trade openness Indian tea industry was benefitting but the growth rate of tea export gets reduced over time. It is surprising that in the post-EXIM-2002–2007 phase the rate of growth of India’s tea exports has declined sharply. The study ends with suitable policy prescriptions.

Citation

Maity, S. and Sinha, A. (2021), "India’s Tea Export in the Scenario of Trade Openness: An Analysis of Trend and Structural Break", Das, R.C. (Ed.) Global Tariff War: Economic, Political and Social Implications, Emerald Publishing Limited, Leeds, pp. 203-216. https://doi.org/10.1108/978-1-80071-314-720211016