OOTY: AL.RM. Nagappan, president of United Planters' Association of South India (UPASI), expressed his concern on the Regional Comprehensive Economic Partnership (RCEP) negotiations currently underway and said that UPASI fears that any further reduction in the import tariff would severely affect the price realisation of plantation commodities, that would subject the sector to further distress.
“As per our analysis, during 2018-19 the trade deficit in the plantation commodities is Rs [-] 5,716.64 crore with RCEP countries, while we had overall trade surplus in the plantation commodities to the tune of Rs. 4,368 crore. This indicates that plantation commodities will be losing significantly if the RCEP agreement materialises”, he pointed out.
Among the five plantation commodities, natural rubber and pepper have an overall trade deficit, irrespective of RCEP. Coffee being an export-dominated commodity and with more than 75 per cent being exported, India has an overall trade surplus of Rs 4763.40 crore, but "we have trade deficit with RCEP countries at Rs.[-] 164.35 crore, suggesting Indian coffee sector will be a loser," he noted.
China, the partner country in the proposed RCEP, being the largest producer of tea poses an immense threat to the Indian tea sector.
Though China is a largest green tea producer in the world, it also produces black CTC teas for the export market and with duty and logistical advantages it may target Indian market. “Moreover, we fear that the Rules of Origin (RoO) criteria will be taken advantage of to route tea through any of the ASEAN countries who have a duty advantage, vis-a-vis China,” he added.
Pleading to the union government to look into the interests of domestic plantation industry, he said given the difficult situation prevailing in the lantation sector, “it is hoped that the plantation commodities will be kept under the exclusion list under the proposed RCEP as otherwise, it would have serious implications for this highly labour-intensive agro-industry.”
