CHANGING INSTITUTIONAL ARCHITECTURE AND INDIA’S EXPORT COMPETITIVENESS IN TEA

Abstract

The study raises the issue of export competitiveness of Indian tea over the last three decades. It discusses the changing institutional architecture governing world tea market in a liberalized world economy. During the last two decades, institutional landscape affecting the export competitiveness environment has changed considerably both globally and locally. Formation of WTO in 1995, various multilateral and bilateral trade agreements, imposition of environment and labour standards, exchange rate fluctuation all have an impact on export competitiveness of Indian tea. As part of wider process of global restructuring of tropical product value chain, the role of commodity boards has changed from that of marketing to that of a facilitator of grade and price stabilization schemes. The earlier arrangements have been progressively dismantled and into this place has emerged a host of emergent forms of market exchange and coordination. New structures have reshaped income flows and cost burden. Branded tea manufacturing had become a highly concentrated sector in most national markets with a common group of multinationals dominating. This study analyses different aspects of export competitiveness of Indian tea in the context of changing institutional architecture. It takes into account aspects like existence of huge domestic market and increasing domestic consumption, relative price of Indian tea in global market, changing product mix, multilateral trade agreement and free trade zones, quality of Indian tea in view of emergence of small growers, institutional interventions etc.