STiR coffee and tea magazine

STiR coffee and tea 17 www.wollenhaupt.com Amsterdam, Netherlands 19-20 May 2026 Save the Date: @ Amsterdam, Netherlands @ Amsterdam, Netherlands Amsterdam, Netherlands @ Amsterdam, Netherlands 19-20 May 2026 @ 19-20 May 2026 Save the Date: @ Save the Date: @ More information about us on our website: www.wollenhaupt.com Tariff Breakdown: Before vs. After FTA Tea Category Tariff Before Tariff Post Significance FTA (2025) FTA (2026) Bulk Black Tea Bulk Green Tea Retail Tea (<3kg Packs) Flavored/Specialty Green Tea Instant Tea/Extracts 0% 0% 3.2–6.4% Up to 6% Up to 10.2% 0% 0% 0% 0% 0% No change No change Boost to origin-packed "Make in India" brands Gains competitiveness in the high-margin segment Major win for the processed beverage sector India-EU FTA: Tariff Relief for Tea The India-EU Free Trade Agreement (FTA), concluded on January 27, 2026, at the 16th India-EU Summit in New Delhi, marks a significant milestone in bilateral trade relations. For India's tea sector, especially Assam's premium orthodox producers, the deal brings long-awaited tariff clarity in one of the world's most valuable consumer markets. But even as tariffs fall to zero, a tougher regulatory test looms ahead. Under the agreement, India secures preferential access to the European Union for over 99% of its exports by trade value. For tea, however, the breakthrough is not in bulk shipments. Those were already entering the EU at zero duty. The structural shift lies in value-added segments. Before the FTA, retail tea packs weighing less than 3kg were subject to duties ranging from 3.2% to 6.4%. Flavored and specialty green teas faced tariffs of up to 6%, while instant tea and extracts were taxed as high as 10.2%. All of these now fall to zero. This levels the playing field for Indian origin-packed "Make in India" brands competing against global blenders in European supermarkets. For companies exporting packaged Assam orthodox or specialty teas directly to Germany and Poland — the EU's major redistribution hubs — the removal of these so-called "nuisance tariffs" is a structural gain. "The India-EU Free Trade Agreement is a historic milestone," says Ajay Jalan, managing director of Mokalbari Kanoi Tea Estate Pvt. Ltd. "It will boost exports, create jobs, and deepen India's integration with global markets. Germany is a key hub, and while duties on Indian black tea are zero, regulatory alignment is crucial to fully benefit." India exports roughly 19-21 million kilograms of tea annually to EU countries. Germany and Poland together account for a substantial share, particularly for Assam orthodox tea, which carries a Geographi- cal Indication (GI) tag and enjoys strong consumer recognition. Assam itself produces over half of India's tea, around 628 million kilograms in 2024, with projections rising further. With India's total tea exports at approximately 262 million kilograms annually, even incremen- tal EU gains can influence price realization for premium segments. Yet the tariff picture only tells half the story. Mohit Agarwal, director of Asian Tea Company, cautions that duty barriers were never the primary challenge in Europe. "Our major EU markets have traditionally been Germany and Poland," he says. "The issues Indian teas face are not duty barriers but MRL compliance." From March 2026, the EU's maximum residue limits (MRLs) for certain pesticides, including thiamethoxam and clothianidin, tighten significantly, with default limits set at 0.05 ppm. These are far stricter than India's domestic FSSAI standards. Industry estimates suggest that if gardens fail to adapt rapidly, high-end exports — particularly from Assam — could contract by 60-70%, potentially ceding market share to competi- tors such as Kenya. The regulatory environment extends beyond pesticide thresholds. The EU's evolving framework includes Digital Product Passport traceability mandates, stricter food safety and labeling norms, ILO-aligned sustainability provisions, and human rights due diligence requirements. The Tea Association of India (TAI) welcomed the FTA but flagged these concerns. "EU regulations on MRLs, food safety, traceability, packaging, and labeling continue to pose challenges," said TAI president, Shailja Mehta, calling for science-based standards and regulatory transparency. Secretary General P.K. Bhattacharjee emphasized that easing both tariff and nontariff barriers is essential to unlock full export potential. For small and medium producers in Assam and North Bengal, compliance may require investment in residue testing, pesticide management systems, certification upgrades, and digital traceability — costs that could outweigh tariff savings without coordinated domestic support. On paper, the FTA strengthens India's position in value-added tea exports — retail packs, specialty teas, and instant extracts — aligning with the country's push toward brand ownership rather than bulk commodity trade. In practice, however, the March 2026 MRL shift may determine whether Indian tea consolidates its European footprint or retreats. The tariff gate has opened. The regulatory wall, however, just grew taller. By Roopak Goswami While the new FTA strengthens India's position in value-added tea exports, producers must now race to meet Europe's strict maximum residue limits (MRLs). Tea Report

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