FPCCI Urges Reforms in Tea Import Policies

Karachi: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called for significant policy changes regarding tea imports, emphasizing the necessity to reclassify tea as a basic commodity rather than a luxury item. Atif Ikram Sheikh, President of the FPCCI, highlighted the urgent need to address current import anomalies affecting tea traders and suggested abolishing the high duties and taxes that currently apply.

Mr. Sheikh pointed out that tea is mistakenly categorized as a finished product at the import stage when it should be treated as a raw material. He criticized the nearly 70 percent total import duties and taxes levied on tea, arguing that these charges are burdensome for small and medium-sized enterprises (SMEs). He stressed that given the widespread consumption of tea among lower-income groups in Pakistan, it is crucial to create a more supportive business environment to maintain affordable prices.

Supporting this stance, Aman Paracha, Vice President of FPCCI and former Chairman of the Pakistan Tea Association, highlighted the disparity between the market reality and the maximum retail price (MRP) set by authorities. He noted that while tea prices start at PKR 800-900 per kg, the MRP is set at PKR 1,200 per kg. This discrepancy forces SMEs to incur taxes at the higher rate, which Paracha described as unfair.

Paracha warned that if the MRP is not reconsidered, consumers could face a price increase of PKR 300 per kg. He urged the government to support tea traders in maintaining low prices without compromising quality and availability. He argued that MRP should only apply to final packaged products, not unblended tea at the import stage, as the current policy lacks economic and regulatory justification.