Russia-Ukraine crisis unlikely to impact India’s tea exports

Tea exporters from India claim that India’s tea exports to Russia, the largest export destination for the commodity, are not likely to be impacted at this stage of the Russia-Ukraine crisis. The exporting community is not currently worried about the crisis in the CIS region as this is generally the lean period for export.

Moreover, with the US going to announce further sanctions on Russia, in addition to financial measures imposed this week, the impact on tea exports to the region may not be “material enough” if India establishes a bilateral payment mechanism as it did with Iran, major tea exporters and industry analysts observed. India has a strong bilateral relationship with Russia and, if required, developing a bilateral payment mechanism would not be difficult, they said.

“Russia is the largest importer of tea in the world. In the last few years, Russia’s import of teas has come down due to higher consumption of coffee, Covid pandemic and economic conditions. But Russia is our largest export destination and CIS countries are fond of Indian Tea.

India exported 30.89 million kgs of tea to Russia between January and November in 2021. In 2020, the export was 33.85 million kgs. The Ukraine market comprises 17 million kgs of tea, and India and Sri Lanka are the major exporters.

As per Tea Board of India data during January-November 2021, India exported 1.6 million kgs. Commonwealth of Independent States (CIS) is a region which consumes orthodox and CTC tea. As there is demand for tea in Ukraine, it will have to buy teas from India, if not now, definitely later as Indian teas are available at various price points which the country will be able to afford.

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