Institutional Financing of Tea Industry in India

Tea Industry has been playing a significant part in the National and world economy over the years. India still remains the largest producer and consumer of tea in the world. The reasons are Indian climate, soil and availability of skilled labour provides the absolute advantage. Indian tea has been one of the major contributors to the foreign exchange reserve of the country. It also employs a large number of workers and accelerates development of supplementary industries like fertilizers, plywood, coal, automobile, etc. Impact of Globalisation coupled with import threats and rising competition from other beverages has adversely affected the tea industry of India. The price level has been declining since 1994 and though there was marginal improvement in the first quarter of 2001. It is established that the loans provided to tea gardens for the planting of tea and its maintenance per unit of land is inadequate. A major strength of the Indian tea industry is the large number of small farmers associated with it. With the present financing available, it may not be encouraging for small tea farmers to take up tea cultivation.