Indian Tea in the Global Market
Review of Management, Vol. 3, No. 1/2, June 2013
Review of Management,
Vol. 3, No. 1/2, June 2013, pp. 11-20
ISSN: 2231-0487
Indian Tea in Global Market
Nissar A. Barua
Department of Economics, Gauhati University, Guwahati
Email: nissar12@gmail.com
Mukta Mazumder
Department of Economics, KRB Girls’ College, Guwahati
E-mail: mukta.m.kakati@gmail.com
Abstract
Over the years India had dominated the global tea export market as the single largest exporter of tea. However since 1990 its market share in the global tea export started falling in a dramatic fashion where within a span of twenty eight years from 1980 to 2008 India lost a whopping 14 percent share in the global tea market. A regression is run to determine the effect of the size of the global tea market on the volume of tea exports from India. The
Regression analysis reveals that the expansion of the global tea market has no significant impact of the volume of exports of Indian tea. A backward stepwise regression is undertaken to define India’s market share in global tea market as a function of the export market share of Sri Lanka and Kenya. The emergence of Kenya as a major exporter of tea had adversely affected India’s market share. However Bangladesh’s share of the global tea market had been falling along with that of India. The declining market share of India in the global tea market can also be attributed to the falling competitiveness of its tea as indicated by the Revealed Comparative Advantage (RCA) Index. Along with India, the competitiveness of China, Bangladesh, and Vietnam has been declining over the period 1996-2008. Relatively recent entrants to the world tea market like Kenya, Sri Lanka, and Nepal have gained at the expense of these traditional heavyweights which is evident in the dramatic increase in their
RCA index. Nepal, who exhibited remarkable increase in the index have reaped the benefit of the similarity of its tea with India’s famous Darjeeling tea.
Review of Management,
Vol. 3, No. 1/2, June 2013, pp. 11-20
ISSN: 2231-0487
Indian Tea in Global Market
Nissar A. Barua
Department of Economics, Gauhati University, Guwahati
Email: nissar12@gmail.com
Mukta Mazumder
Department of Economics, KRB Girls’ College, Guwahati
E-mail: mukta.m.kakati@gmail.com
Abstract
Over the years India had dominated the global tea export market as the single largest exporter of tea. However since 1990 its market share in the global tea export started falling in a dramatic fashion where within a span of twenty eight years from 1980 to 2008 India lost a whopping 14 percent share in the global tea market. A regression is run to determine the effect of the size of the global tea market on the volume of tea exports from India. The
Regression analysis reveals that the expansion of the global tea market has no significant impact of the volume of exports of Indian tea. A backward stepwise regression is undertaken to define India’s market share in global tea market as a function of the export market share of Sri Lanka and Kenya. The emergence of Kenya as a major exporter of tea had adversely affected India’s market share. However Bangladesh’s share of the global tea market had been falling along with that of India. The declining market share of India in the global tea market can also be attributed to the falling competitiveness of its tea as indicated by the Revealed Comparative Advantage (RCA) Index. Along with India, the competitiveness of China, Bangladesh, and Vietnam has been declining over the period 1996-2008. Relatively recent entrants to the world tea market like Kenya, Sri Lanka, and Nepal have gained at the expense of these traditional heavyweights which is evident in the dramatic increase in their
RCA index. Nepal, who exhibited remarkable increase in the index have reaped the benefit of the similarity of its tea with India’s famous Darjeeling tea.
References: Balassa, B. (1965). Trade liberalization and revealed comparative advantage. The Manchester School of Economic and Social Studies, 33 (2), 99-123. Food and Agriculture. faostat.fao.org, ‘FAOSTAT,’ www.faostat.fao.org Tea Board (1956-2011) UNCTAD. (2010) ‘Non tariff measures, Evidence from selected developing countries future research Agenda’, United Nations Conference on Trade and Development