Abstract:
India is actively engaged in FTA negotiations with EU and it is
expected to realize in the near future.Though sensitive products list is
not known to the public, agriculture sector is also under active negations
and EU is aiming for bringing 90 per cent of Indian agricultural
products to zero level tariffs with possibly no special safeguard measures
to protect from import surges and special and differential treatment
that exempts developing countries from the same strict trade rules and
disciplines of more industrialized countries (Sing and Sengupta 2009).
The agricultural sector in generaland plantation sector in particular has
been under protection for long time and plantation sector provides
employment and livelihood for millions of people in India. It seems
that opening up of the market to developed countries such as EU, will
have larger impact on Indian plantation sector. In this respect the study
makes an attempt to assess the impact of India-EU FTA on Tea and
Coffee and explores long term advantages through deep integration.
Assessment is based on present trends in tea and coffee export, import,
export unit value, import unit value, tariff structure, composition and
direction of tea and coffee trade of EU-27 and India.
In terms of tea and coffee trade structure, India is mainly a low
priced market for tea and coffee and imports low priced tea and coffee
from the world. In such a scenario, the high valued tea and coffee from
Europe may not compete with Indian tea and coffee market. However,
in India, small and marginal farmers contribute major part of production
in tea and coffee sector and such farmers are not well equipped to make
value addition to their produced products, and cater the market for
value added products. Though, this sector is potential for private
investment especially value addition in supply chain, the private sector
investment is not taking place in a big way. In this respect , India needs
to explore the opportunities to attract EU multinational companies
engaged in coffee manufacturing to invest in India and collaborate
with Indian coffee manufacturing units, so that Indian value added
plantation products such as Tea and Coffee can access the European
and other developed countries market.