Russia and India could start jointly producing packaged teas

Russian and Indian tea companies could start jointly producing packaged teas in Russia, Sujit Patra, representative of the India Tea Association, announced on Monday.

“Russian importers of tea and tea companies are very interested in increasing their purchases of tea from India. As a matter of fact, the Roschaykofe Russian Association of Tea and Coffee is interested in establishing joint ventures with Indian companies to produce packaged tea in Russia,” Mr. Patra told the Economic Times of India. According to him, the Indian side has already held talks with Russia’s largest tea producer – Orimi Tea.

Import duties on packaged teas in Russia may be as high as 18%, making things hard for foreign brands, which due to the higher price have a difficult time to compete with locals in the market. However, loose tea imports are not charged any custom duties. Currently, teas of two Indian brands – Maharaja and Nargis – are available in Russia.

According to Mr. Patra, the demand for packaged tea and tea bags in Russia is growing rapidly. “The fastest growing category in Russia is tea bags,” he said. Moreover, packaged teas occupy 60% of the market, while the remaining share falls to tea bags.

Earlier, India supplied the former Soviet Union with 130-140 million kg of tea annually, but after the collapse of the USSR, the share of Indian imports dropped significantly. Currently, they stand at about 43 million kg per year. The size of the Russian tea market has been estimated at about 160 million kg annually. The average amount of tea consumed by the average Russian is 1.2–1.3 kg per year, while in India, this figure is only 750 grams.

First published in Russian by RIA Novosti.

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