FPCCI urges reforms in tea import policies to support traders, keep prices stable

KARACHI: President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Atif Ikram Sheikh has called for immediate policy interventions and the resolution of anomalies related to tea imports.

He said that tea should be treated as a necessity and a basic food item for all, rather than a luxury -- as is currently the case at the import stage, according to an FPCCI statement issued on Tuesday.

Sheikh maintained that tea traders are suffering due to various policy and regulatory shortcomings. Tea is incorrectly classified as a finished product at the import stage, whereas it is actually a raw material that undergoes processing, blending, packaging and marketing. He added that levying approximately 70 per cent in total duties and taxes on the import value of tea is unreasonable and prohibitively expensive for small and medium-sized enterprises (SMEs).

The FPCCI president further noted that given Pakistan’s socioeconomic landscape and labour demographics, most tea is consumed with basic staple foods -- such as roti or paratha -- by construction workers, factory labourers, daily wage earners and other segments from the lowest strata of society. As such, he stressed the need for a facilitative and enabling environment to help the business community maintain stable and affordable tea prices.

Vice President of FPCCI and former Chairman of the Pakistan Tea Association (PTA) Aman Paracha pointed out that authorities have set an unrealistic maximum retail price (MRP) for tea at Rs1,200 per kilogramme, despite market prices starting at Rs800-900. This, he argued, forces SMEs in the tea sector to pay taxes based on Rs1,200 per kilogramme, which is highly unfair and unjustified.

Paracha warned that if the MRP is not abolished, retail tea prices could rise by Rs300 per kilogramme. He urged the government to facilitate tea traders in keeping prices as low as possible while maintaining quality and availability.

He further explained that the government should not impose an MRP at the import or customs stage for unblended tea. Instead, the MRP should only apply to tea bags or fully packaged final products. Setting an MRP on unblended tea at the import stage makes no economic, commercial or regulatory sense, he concluded.