The commerce secretary has also urged the Indian tea industry to gear up for meeting the challenges of integration of Indian economy with the global market by improving productivity, cost competitiveness and conforming to international hygiene and quality standards.

Speaking at the inaugural session of the International Tea Convention organised by United Planters' Association of South India in association with the Tea Board in Kochi, the commerce secretary said that the Indian tea industry is in throes of a major change following the paradigm shift the industry has been witnessing the world over following the progressive reductions in import restrictions and other market related development.

``So far the Indian tea industry has grown under an environment ofimport ban and other protective policies. However, by virtue of being a signatory to the World Trade Organisation (WTO), the industry can no longer hope for such protective umbrella. Doing away with import restrictions are the order of the day and the government will have to progressively lower the tariff wall on imports within a short span of time,'' Parbhu said delivering the keynote address at the convention.

He said the central government has already eased tariff restriction on several commodities imported from SAARC countries, including tea in tandem with the idea of forming a South Asian Free Trade Association (SAFTA).

He said the new paradigm that rules the global market hinges not only on price competitiveness but also on adhering to quality and hygienic standards. ``The Indian tea industry should understand the new rules of the game and adapt to the changes for its survival in the next millennium,'' the commerce secretary has urged.

Referring to the cost-price mismatch, Prabhu said the teasector, despite reverses in the past, tea prices have gained more compared to other agricultural products in the past.

``While the price index of tea stood at 500 in 1998, it was 455 in the case of entire food products and 300 in the case of sugar,'' the commerce secretary said adding ``therefore the industry's claim about non-remunerative prices is quite contrary to the facts.''

He said, the central government is watching the movement of price and production of tea closely as it falls under the purview of essential commodities. Though, the total tea production last year was estimated at 870 million kg, in 1999 it has failed to catch up with the ever- increasing growth in consumption with production from January to July this year down by 64 million kg compared to last year.

``During the past one decade, the domestic tea consumption has grown by over 10 million kg per annum. However, the production has failed to catch up with consumption growth putting pressure on exports and prices. The government isconcerned at this development,'' the commerce secretary said adding ``if the shortfall in production pushes up the prices, the government will have to allow bulk imports to maintain the price line.''

He said the situation has stemmed from the fact that despite the increase in aggregate production, productivity of Indian tea plantations are lower compared to international standards.

Growers should focus on improving the productivity and should realise that bringing in more area under cultivation could not check increase in production cost. ``The only way out for Indian tea industry to face the new challenges is to improve productivity,'' he added.