Indian tea takes a hit as exports to Pakistan drop by 50 percent

• India’s tea exports to Pakistan have dropped by 50pc during January-August 2019.
• Tea exporters in India are concerned over payments.

India’s tea exports to Pakistan have been shelved by 50 percent owing to growing tensions between the two neighboring countries.

According to Business Standard, India’s tea exports to Pakistan during January 2019 to August stood at 3.14 million kg, valued at $4.80 million, against 6.17 m kg (worth $9.02 million) during the same period last year.

“Pakistani buyers usually don’t falter on payments. Our trade relations with them were good until recently. But the Pulwama attack earlier this year hit exports. And now, the situation has worsened. We are unsure if payments would come if we sent them consignment,” said a tea exporter to Pakistan.

As per the report, Pakistan is the world’s biggest tea importer after Russia in value terms. According to estimates, the country imports about $560 million worth of tea every year, compared with $490 million worth of tea imports by Russia.

“Some planters have contracts with Pakistani buyers signed even before the start of the season. The tea still being shipped to Pakistan is primarily the contracted volume,” said a tea exporter.

Tensions between the two arch rivals have soared after the Indian government announced in August to revoke special status from Indian occupied Kashmir, leading to increased cross border skirmishes at Line of Control.