A

GLOBAL COMPREHENSIVE PROJECT REPORT

ON
SPAIN COUNTRY IMPORT-EXPORT ON TEA INDUSTRY
Submitted to
R.B. INSTITUTE OF MANAGEMENT
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDENCE OF

Faculty Guide
Ms. Heena Thanki
Head of Director

Submitted By
Bhavna Ainani (127460592003)
Dhaval Patel (127460592085)
Hiral Patel 127460592087)
Kiran Patel127460592091)
Vipul Pateliya (127460592104)
M.B.A-SEMESTER 4

MBA PROGRAMME
Affiliated to
Gujarat Technological University
Ahmedabad
1

Student declaration
We, following students, hereby declare that the Global/ Country Study Report titled
Spain & India import-export on tea industry in is a result of my/our own work and our
indebtedness to other work publications, references, if any, have been duly
acknowledged. If I/we are found guilty of copying any other report or published
information and showing as my/our original work, or extending plagiarism limit, I
understand that I/we shall be liable and punishable by GTU, which may include Fail
in examination, Repeat study & re-submission of the report or any other punishment
that GTU may decide. Name of Institute with code _______
Country : Spain
Semester : 3rd
Group no enro no

name

HIRAL PATEL

spain &India

DHAVAL PATEL

import-export

BHAVNA AINANI
KIRAN PATEL

sign

selected industry

on tea
industry

VIPUL PATELIYA

Institute Certificate
Certified that this Global Country Study and Report Titled Culture & Education in
Spain is the bonfide work of attached student list with enrollment numbers, who have
carried out their research under my/our supervision. I/We also certify further, that to the
best of my knowledge the work reported herein does not form part of any other project
report or dissertation on the basis of which a degree or award was conferred on an
earlier occasion on this or any other candidate. I/we have also checked the plagiarism
extent of this report which is % and the separate plagiarism report in the form of
html /pdf file is enclosed with this.

Signature of the GCSR Coordinator/s

(Name, Designation, Email ID and Contact No. of GCSR Coordinator/s)

Signature of Principal/Director
(Name of Principal / Director)

PREFACE
This study was the Confederation of Spain Education and Culture.

The study on education raises profound and far-reaching implications for all
those involved in the creation of the Spain higher education area, notably the
challenges represented by education impact at the local, regional, national and
Spain levels.

It is important that reactions to these multi-level result in a co-ordinated set of

Spain culture responses. Culture should be viewed as a positive set of
opportunities and not something to be feared. It is a new and permanent reality in
Spain culture life.

The globalisation of higher education manifests itself in various forms, of which

education is perhaps the most visible. It is something that cannot be ignored.
Education has clear long-term implications for the nature and structure of
educational provision in Spain.
The report identifies vital issues that demand our serious consideration. It
suggests a positive way forward and provides a coherent and detailed set of
solutions for all stakeholders involved in building a Spain of knowledge. Its
messages should not be ignored.

Acknowledgement
The present work are a result of perpetual encouragement, discussion & valuable
guidance of Henna Thanki to whom, we are thankful for guiding thought out the entire
project. We humbly please our feeling & deep essence of gratitude.
We are also thankful to GTU for providing us the opportunity to understand the country
as a part of mba programmed.
We express our deep some of gratitude towards our guide, without whose kind help this
project Study would have been extremely difficult. She has helped me with her valuable
suggestions right from.
The beginning till the final draft of the report. We are also grateful to mrs.heena thanki
HOD of the R.b. institute of management studies for their kind effort to make all the
required facilities available & gave their valuable suggestions in preparing this project
report.

Index
Sr. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

27
28
29
30
31
32
33
34
35

Title
Student declaration
Institute Certificate
PREFACE
Acknowledgement
Summary on Spain culture & education
Summary on Spain-India Export-Import
Tea Industry in India
Health Benefits of Tea
Types of Tea
Production of tea in India
Process of production
Top tea brands in India
India tea industry present scenario
Top tea producing states in India
SWOT analysis of Indian tea industry
PORTER'S FIVE FORCES MODLE of Indian tea
industry
Tea Production April to September 2012-2013
Export of Tea 2011-12 to 2012-13
Analysis of Indias Trade in Tea
Tea Development
Achievements during 2012-13
Spain
Strategy
Procedure of export
How to Get an Export License in India
HOW TO START AND OPERATE YOUR OWN
PROFITABLE IMPORT/EXPORT BUSINESS AT
HOME
INDIA-SPAIN RELATIONS
Bilateral Agreements and Treaties
Trade and Investment
Science and Technology
Cultural and Academic Relations
PROMISING SECTORS OF INDO-SPANISH
COOPER
Current Scenario
Current and Future Challenges
Bibliography

Page No.
2
3
4
5
7
12
21
22
23
25
26
29
32
34
35
37
38
40
43
43
44
46
47
47
50
51

52
53
53
54
55
56
56
58
59

Summary on Spain culture & education

The cultures of Spain are European cultures based on a variety of historical influences,
especially that of ancient Rome, but also the pre-Roman Celtic and Iberian culture
In the late 19th and 20th century, Spain became the diversity of international culture
Symbols
The red and golden yellow colors of the flag of Spain was first used in the late 1700s by
the King of Spain, as he tried to easily differentiate his ships from those of other
countries.
Culture
Culture of Spain has a heavy Latin influence.
Romans also influence Spanish culture because Spain was once part of the Roman
Empire. Roman architecture and art is common throughout Spain.
Bull Fighting
This is one of the most dangerous sports, and only Spain.
Bulls integral part of the traditions in Spain
Music in Spain
Flamenco, a genus of Andalusia music. But here also the existences of rock music,
people, pop and hip hop in Spanish lands.
Spanish Dance
Flamenco
Classical Spanish Dance
Folklore
Eighteenth Century Dances
Classical Ballet Dance
Castanets
Spanish Fashion
Be it formal suits and elegantly cut suits.
Spanish Family
The structure and family size vary, but generally, people live to fewer children and
fewer people live in their homes with family

Food

The Spanish begin the day with a light breakfast

They usually eat lunch at 2 or 3 in the afternoon every day.

Dinner is eaten at any time between 20:00 and midnight

Festival of Spain

Seaman Santa

San Fermin (Pamplona Bull Run)

Pamplona Bull Run Essentials

Tomatina Tomato fight

Feria de sevilla

Christmas & New Year

Carnival

Birth ceremony
In the 16th century, bath birth and name the child is usually held on the fourth day after
birth. It was attended by parents and relatives, who gathered at the house before
sunrise to party and watch the ceremony.
Marriage
Spanish authorities can take 30 to 45 days to approve an application for marriage
Civil Marriage
Normally needs the documents
Religious Marriages
For a religious ceremony, couples first need the permission of the civil authorities
Have each separate religious documentary requirement.
In most religious marriages in Catholic Spain, the demands of the Catholic Church
Marriageable age
Generally are set at eighteen for men and sixteen years for women.
Death
People who put flowers on the graves of beloved family.
8

Society Overview
Spain established colonies in the New World from Alaska to Cape Horn with the
exception of Brazil and the eastern parts of Asia.
Much of the culture in Spain revolves around commerce, but it was the main source of
revenue for the government and the people.
Education in Spain

The school is free and compulsory for all children from age six to sixteen

All students receive basic vocational training in secondary education

Religious education is available but optional

Schooling

Children ages 3-5 have the opportunity to attend preschool.

Pre-school is free for all students in Spain.

Primary school for ages 6-11. Secondary schooling begins when the child is
between the ages of 12-15.

Nursery education
0-6 years organized in two stages of three years each. This is a volunteer with the
second stage of 3-6 years being widely accepted
Primary school
From 6-12 years of age, compulsory and free in public schools and subsidized.
Secondary level
Compulsory secondary education (CSO): 12-16 years.
The success of students leaves school with a certificate of high school.
Vocational Training
Vocational training is also a common ability after secondary education

1. Middle level training

2. Higher level training

Spain Baccalaureate (Bachillerato)

The baccalaureate [secondary certificate] lasts for two years, usually 16-18, and confers
bachelor's [degree].
Higher education in Spain
Degree Program - Basic program undergraduate and / or general education-oriented;
Advanced training program of the Master specialized or multidisciplinary, academic or
professional oriented;
Doctoral Program - Advanced training in research techniques.
Public universities
The institutions created by the Spanish Parliament Act, proposed by the Government
Private Universities
Private universities are the institutions created by natural or legal persons
Admission
Undergraduate Studies (First cycle)
Students who have completed upper secondary education and have a certificate of
completion valid school and have qualified higher education studies
Masters Degree (Second Cycle)
Students, who are interested in the Master's program in Spain, must have a bachelor's
degree or equivalent relevant.
PhD studies (Third Cycle)
The students, who are applying for the doctoral program at a university in Spain, you
must have a Master's degree or equivalent diploma.
Documents Required
Completely filled application form.
Proof of sufficient financial assets to finance the studies.
A passport valid for the period of stay in Spain
Full details of educational training, including subjects and grades
If the original documents that a student needs to present the English translation of it,
along with the application form

10

 IELTS / TOEFL as proof of English proficiency.

Application Forms
To apply for Spanish universities, you can download the application forms directly from
their respective websites.
Admission Procedure
Download the application for college for their respective websites. Fill the completed
application form along with all relevant documentation. Send the application form before
the deadline
Tuition Fees
At Public Universities
The degree of public universities in Spain can be anywhere between 535 euro and
1,280 euro per academic year
At Private Universities
Private institutions in Spain charge tuition fees much higher than public universities.
Tuition fees for undergraduate studies may fall in the range of 5,335 Euros and 12,805
Euros per academic year, depending on the course

11

Summary on Spain-India Export-Import

Tea Industry in India

The tea is just staple drink in India, but as a staple drink here and a day without it
is impossible and incomplete.
The Indians prefer their steaming cup of tea, because for them it acts as an
energy booster and is simply indispensable.
This popular beverage has a lot of health benefits too, and its antioxidants help to
eliminate toxins and free radicals from the blood.
Tea production in India was 979,000 tonnes from 2009
In terms of consumption, production and export of tea, India is the world leader.
It is responsible for 31% of global tea production. India has maintained its
leadership in the tea industry in the last 150 years
There is a wide variety of tea offered by India; Green Tea with sweet tea
Darjeeling and Assam tea strong, the range of tea available in India is
unparalleled.

Health Benefits of Tea

Study finds tea drinkers have lower blood pressure
Tea may lower cholesterol and protect against heart disease
Black tea can lower "bad" cholesterol
Green and black tea can slow the spread of prostate cancer
Tea may protect against cancer caused by snuff.
Green tea and white tea fight colon cancer

Types of Tea
White tea
Yellow tea
Green tea
Oolong tea
12

Black tea

Production
In 2003, world tea production was 3.21 million tonnes.
In 2010, world tea production reached over 4,520,000 tones after rising 5.7% between
2009 and 2010 production increased by 3.1% between 2010 and 2011. 'S largest
producers of tea are the China, India, Kenya, Sri Lanka and Turkey

Tea Production April to September 2012-2013

In the period September 2012 tea production has fallen by 2.8% since August 2012.
Tea production in the country rose marginally 690.31million kg in the first half of the
financial year on the back of increased production in northern India.
The country produced 688.67 million kg of tea in April and September 2011 at 12.
Tea production in north India, comprising the main tea-producing regions of Assam and
West Bengal rose 1% to 562.67 million kg in April-September 2012-13 compared to
559.82 million tax kg in the previous year

Tea manufacturing Process

Withering
Rolling
Roll-Breaking
Fermentation/Oxidization
Firing & baking
Sorting & grading

Top tea brands in India

Tata Tea
Society Tea
Duncans Double Diamond Tea
13

Brooke Bond Red Label Tea

Taj Mahal Tea
Wagh Bakri Tea Group
Lipton Tea
Tetley Tea
Marvel Tea
Pataka Tea

India tea industry present scenario

At present, tea prices have increased due to dry weather during the early part of 2012,
followed by the recent floods in Assam.
In 2011 the industry produced 988 million kilos of tea and it is expected that total
production for 2012 to be the same.
In July 2012 Tea prices had increased by 18 percent compared to July 2011.
From 2001-2010 this figure was 73 INR . This will occur by the application of black tea
is more production levels.
India is the largest consumer of black tea and exports 17 to 20 percent of total
production compared to Kenya and Sri Lanka to export 90 to 95 percent of total
production due to smaller markets
A portion of the tea, which is supposed to be used for exports is being redirected to
local consumers in India. In 2011, 192 million kilos were exported , but in 2016 the
figure is supposed to fall to 127 million kg

Top tea producing states in India

Himachal Pradesh
Arunachal Pradesh
Bihar
Darjeeling
Assam
Kerala
Sikkim
Tamil Nadu

14

SWOT analysis
Strengths

Strong production base with 75 percent of production is explained by organized

sector covering 1,600 landscaped property of nearly 1,100 institutions competent
management staff.
Strong research backing of well-established research institutions. Availability of
facilities modernized and improved manufacturing.
Labour Welfare Laws protecting workers

Weaknesses

Decreased availability of labor especially in southern India. Remote location of

plantations and transport of long-distance tea gardens tea outlets . Lack of
infrastructure access roads to the gardens

Difficulties in introducing mechanization of field operations due to topographical

constraints and quality.

Lack of quality control mechanism particularly for teas sold through private sales

Opportunities

Specify the gap between supply and demand due to the increase in the growth
rate of consumption in the major producing countries.

Producing countries to agree the formation of an exclusive forum to resolve their

differences on issues of common interest.

Threats

The production in countries such as Sri Lanka, Vietnam Round-the-year. Low

cost of tea production in Kenya, Vietnam and Indonesia, etc.

Better developed packaging and bagging ability Sri Lanka

Other producing countries produce better quality of tea

15

PORTER'S FIVE FORCES MODLE:

Industry Rivalry (High):

Market is dominated by a large number of unorganized players.

There are low switching costs

Bargaining Power of Buyers (High):

There are a large number of buyers who buy the product

bargaining power of buyers is high and buyers have many options available.

Bargaining Power of supplier (Low):

There are a number of tea products in India

Threat of substitute (moderate):

Substitutes coffee, cold drinks, juice.

Threat of new Entrance (high):

Large untapped rural market for branded tea segment in rural India and Indian
tea in global market.

Export of Tea 2011-12 to 2012-13

Data from the Tea Board of India show that last year, tea production in the country was
set at 1,126 million kg.
During January and August, tea production has increased by 6.2 percent to 705 million
kg, compared to 664 million kg in the corresponding period last year.

16

In the first quarter January to March 2013 , exports increased by approximately 34

percent to 59.8 million kg
The total volume of exports in 2011-12 was 214 million kilos, compared to 214 million kg
in 2010-11.
Total foreign exchange earned during 2011-12 was Rs. Rs 3.305 million compared to
Rs. Rs 2.996 million in 2010-11
During 2012-13 (April-December) exports are estimated at 156.38 million kgs valued at
Rs. 3062.69 crore with a price of Rs.195.85 per kg against 169.65 million kgs valued at
Rs. 2617.57 crore with a price of Rs.152.04 per kg during the corresponding period last
year.

Tea Development
The formulation and implementation of development plans for increasing production and
productivity of tea plantations, modernization of tea processing , packaging and facilities
Financial assistance for the above activities extending through plan approved for
implementation plans
Total subsidy paid during the period of the XI Plan was Rs.515 Cr . ( Approx.) . The
physical achievement over the past five years is on the table

Spain
India also seems to export tea to Spain very less used for commercial purposes.
Spain is a country of coffee consumption.
As a result, the tea does not have a great tradition in Spain, although the demand for
which is increasing

Spanish used type of tea is following

Black tea.
Green tea
Fruit tea
17

Lime blossom tea

Strategy
Export strategy was used. In Spain, the black tea and green tea is the most demand.

Procedure of export
STEP1: Enquiry
STEP 2: - Performa generation
STEP 3: Order placement
STEP 4: Order acceptance
STEP 5: Goods readiness & documentation
STEP 6: Goods removal from works
STEP 7: Documents for C & F agent
STEP 8: Customs Clearance
STEP 9: Document Forwarding
STEP 10: Bills negotiation
Step11: Bank to bank documents forwarding
STEP 12: Customs obligation discharge
STEP 13: Receipt of Bank certificate

How to Get an Export License in India

Export License
Export of Samples
Processing of Shipping Bill
Let Export Order

18

HOW TO START AND OPERATE YOUR OWN PROFITABLE

IMPORT/EXPORT BUSINESS AT HOME
1. Making Contacts
2. Analyze the Market
3. Where to Find Help
4. Making Connections
5. Getting the Goods
6. Making an Agreement
7. The Sale
8. Terms of Shipping
9. The Freight Forwarder
10. The Letter of Credit
11. Delivering the Goods

INDIA-SPAIN RELATIONS
Bilateral Agreements and Treaties

Agreement on Trade and Economic Cooperation (1972)

Agreement on Cultural Cooperation (1982). The CEP for the period 2005-08 was
signed in March 2005
Civil Aviation Agreement (1986).
Double Taxation Avoidance Agreement (1993).
Bilateral Investment Protection and Promotion Agreement (1997).
Extradition Treaty (2002)
MoU on Institutionalization of Political Dialogue (2006)
Mutual Legal Assistance treaty on Criminal Matters (2006).
MoU between Technology Development Board (TDB) and the Centre for
Development of Industrial Technology (2006).

19

Trade and Investment

India-Spain bilateral trade in the year 2012 stood at USD 5.17 billion (Exports from
India: USD 3.56 billion; imports from Spain: USD 1.61 billion).
Bilateral Trade between India and Spain from January to November, 2013 stood at USD
4.33 billion; Spains exports to India during the given period stood at USD 1.36 billion
and Indias exports to Spain stood at USD 2.96 billion.

Science and Technology

The Technology Summit was inaugurated by the Honble Minister of Science &
Technology.
A 17- member delegation comprising of officials of DBT, representatives of Academia,
Industry and FICCI visited Madrid and Barcelona from May 20-22, 2013.

Cultural and Academic Relations

Cultural performances, film shows and exhibitions are regularly organized to strengthen
mutual understanding of the societies.
Academic exercises like seminars and colloquiums facilitating study of each others
history and culture and the provision of scholarships play an important role in this matrix

PROMISING SECTORS OF INDO-SPANISH COOPERATION

Science and Technology
Energy
Information and Communication Technology
Biotechnology including Pharmaceuticals, Life Sciences and Nano Technology
Agriculture Technology & Food Processing
Infrastructure

Current and Future Challenges

Despite the booming business relations between the two countries, Indian companies
expanding into Spain and vice versa, need to be aware of the language barriers and the
cultural differences that exist between the two countries.
Cultural sensitization is a topic, which can be dealt easily, if identified and recognized in
time.
All the experts on the panel agreed that the best way to enter either market is through
Joint Ventures in a specific industry as a testing ground.
20

Tea Industry in India

The tea is just tea in India, but as a staple drink here and a day without it is impossible
and incomplete. The Indians prefer their steaming cup of tea, because for them it acts
as an energy booster and is simply indispensable. This popular beverage has a lot of
health benefits too, and its antioxidants help to eliminate toxins and free radicals from
the blood.
Originally tea comes from the east and north parts of India, but the tea industry has
expanded and has grown tremendously in recent years, making India the largest
producer and producer of tea in the world. Tea production in India was 979,000 tonnes
from 2009. In terms of consumption, production and export of tea, India is the world
leader. It is responsible for 31% of global tea production. India has maintained its
leadership in the tea industry in the last 150 years. The total turnover of this industry is
about Rs.10, 000 crore. Since 1947, tea production in India has increased by 250% and
the land is used for production has increased by 40%.
Even the export sector in India has seen an increase in the export of this product. The
type of total net change in India's roughly Rs.1847 crores per year. The tea industry in
India is labor intensive, ie, which depends heavily on human labor rather than
machines. This industry employs over 1.1 million Indian workers and nearly half of the
workforce is women

There is a wide variety of tea offered by India; Green Tea with CTC tea for sweet tea
Darjeeling and Assam tea strong, the range of tea available in India is unparalleled.
Indians take great pride in their tea industry, due to the dominance of the industry as a
major source of foreign exchange earnings and a major contributor to India's GDP.

21

The three prominent regions of tea cultivation in India are Darjeeling, Assam and Nilgiri.
While Darjeeling and Assam are found in the northeastern, Nilgiri is a part of the
southern region. A visit to these regions is made truly memorable by endless rolling
green mats that are tea gardens and one cannot help but feel captivated and enthralled
at the sight of the huge tea plantations. Most tea factories are located within the
premises of the tea plantations and this is what accounts for the freshness of the tea.
The tea production process has a number of procedures and processes. The process
begins with plucking tea leaves in tea plantations by employees carrying a basket on
her head and ends with the production of the final tea.
There are mainly two forms of tea production in India namely the production of CTC and
orthodox production. CTC is an acronym crush, tear and curl. The tea produced by this
method is mostly used in tea bags. Orthodox production method has five stages,
namely, fulminant, rolling, fermentation, drying and finally storage. You can not compare
the two varieties, since their quality depends on factors such as rain, earth, wind and
method of pluck tea leaves and both have a unique charm of their own.

Health Benefits of Tea

Contain fluoride to protect your teeth and remove bacteria properties to maintain
good breathing.
Study finds tea drinkers have lower blood pressure
Tea may lower cholesterol and protect against heart disease
Black tea can lower "bad" cholesterol
Green and black tea can slow the spread of prostate cancer
Tea may protect against cancer caused by snuff.
Green tea and white tea fight colon cancer
Hot tea may reduce the risk of some types of skin cancer
The consumption of green tea may reduce the risk of stomach cancer green and
oolong teas reduce risk of hypertension
Tea believed to boost the body's defenses
Tea may play a role as a fighter AIDS
22

Types of Tea

Type

Water temp.

Steep time Infusions

White tea 65 to 70 C (149 to 158 F) 12 minutes 3

Yellow tea 70 to 75 C (158 to 167 F) 12 minutes 3
Green tea 75 to 80 C (167 to 176 F) 12 minutes 46
Oolong tea 80 to 85 C (176 to 185 F) 23 minutes 46
Black tea

99 C (210 F)

23 minutes 23

White tea:
In China, the rare tea shorter evaporation, not rusty, new shoots of growth, not the
leaves, sweet and mild flavor are collected This is the rarest variety of tea. The leaves
are picked and harvested before they are fully open and the buds still have a covering
of white hairs on them. White tea undergoes less processing and is not fermented. It
has a mild, sweet flavor and contains less caffeine and more antioxidants than any
other tea.
The ideal water temperature for brewing white tea is 76 to 85 degrees Celsius. The
leaves should be soaked in water for at least seven to eight minutes.

23

Green tea
Evaporation for 8-24 hours , there is a process of oxidation , very popular in China and
Japan, low in caffeine and high in antioxidant properties, aid digestion . When tea
leaves are collected , generally , where dry , and when this occurs, the oxidation is
carried out . When green tea is made , are not allowed to rust. The leaves are dried very
quickly , either in a pan or oven for drying and then stored . This process preserves the
catechism polyphenols and flavonoids that make drinking green tea a healthy and
beneficial option . But green tea has a grassy taste and flavor is lost within a year .
To prepare a cup of green tea , the water is over 80 degrees Celsius should be poured
over the tea leaves . Let the leaves soak in water for about two or three minutes. Some
of the benefits of green tea are its antioxidant properties that help prevent cancer ,
increase metabolic rate and reduce fat and even reduce the likelihood of heart disease .
Because of its short preparation time, green tea is stimulating

Black tea:
The highest in caffeine, evaporated 8-24 hours, roll the leaves, fully oxidized, strong in
flavor of this tea is stronger than any other type of tea. The caffeine content is higher in
black tea compared with the less oxidised varieties. It retains its flavor for many years.
The black tea is the tea that enjoys the highest sales in the world.
To prepare a cup of black tea we need a teaspoon of tea leaves for a cup of tea. The
tea leaves are immersed in boiling water for at least three or four minutes before it is
poured and served. Unsweetened plain black tea contains antioxidants and is beneficial
in reducing cardiovascular disease.

Oolong tea:
More difficult to process, partially oxidized, evaporate for 8-24 hours, throw to hurt the
edges of the leaves are of Chinese origin, this tea is a cross between the popular black
and green varieties and healthy both styles commonly associated with this tea are
24

green and amber. The uniqueness of this tea is attributed to the different way in which
the leaves are prepared and due to this reason, in addition to being deprived of leafy
green tea flavor it tastes different from other types of tea also.

Yellow tea
This tea is processed in a manner similar to green tea, but instead of drying immediately
after fixation is stacked covered and gently heated in a moist environment. This initiates
the oxidation in the leaf chlorophyll through non-enzymatic and non-microbial media,
resulting in a yellowish or greenish-yellow

Production
In 2003, world tea production was 3.21 million tonnes. In 2010, world tea production
reached over 4,520,000 tones after rising 5.7% between 2009 and 2010 production
increased by 3.1% between 2010 and 2011. 'S largest producers of tea are the China,
India, Kenya, Sri Lanka and Turkey
WORLD TOP 10: HIGHEST TEA EXPORTS IN THE WORLD
RANK
1
2
3
4
5
6
7
8
9
10

COUNTRY
Sri Lanka
China, mainland
India
Kenya
United Kingdom
Germany
Viet Nam
United Arab Emirates
Indonesia
Poland

EXPORT VALUE 1000 US$

1,476,881
965,080
867,143
858,250
262,959
229,383
204,018
191,814
166,717
139,393
25

Tea manufacturing Process

Once the fresh leaf is brought to the factory, the sheet is subjected to a process that
transforms fresh leaf in black tea, or "tea made." On average, 22 to 25 kilos of tea made
is made to from each 100kgs of fresh tea leaves. This process is one that has been
honed and perfected over more than a century and requires a lot of knowledge and
experience to ensure the quality of tea is not compromised at any stage manufacturing

Withering
Withering is most critical in the black tea manufacturing process. The primary goals are
to reduce fulminant moisture content of the leaf and to soften , so it becomes pliable
and resists posterior process of " balancing " without spalling . In addition , controlled
removal of moisture from the fresh leaves to activate a series of biochemical reactions
is required. These enzymatic changes are responsible for the production of various
products to achieve desired biochemical quality parameters in the tea made .
Withering the duration depends on the temperature and humidity and can vary from 18
to 24 hours , with the season and the region is also a factor. A neglected cross as an
unequal distribution will not result in a good area, even from the best type of blade.
Good wither prevent blade breakage , but will give a twist. Spirits of fresh leaves are
bitter , but the well dried leaf : the sweetness

Rolling

26

The purpose of the lamination is to achieve the final curved appearance and to break
the cell walls of the sheet in order to release the essential oils to initiate a chemical
reaction of the fermentation . The lamination process is what releases the color,
strength , aroma and flavor of the liquid ultimately pour into our cups .
In this process the green leaf is replaced by a coppery brown texture. The application of
pressure during rolling is important to express the juice and the rolling cycle consists of
pressure applied and then released . During leaf juices extend themselves over the
sheet, which are dried and kept in a soluble state. When the cells of the leaves were
broken after lamination withered leaf , leaf enzymes in contact with oxygen in the air
which initiates the chemical reactions necessary for the production of black tea .

Roll-Breaking

Roll breakup has two main objectives. To remove the twisted sheet laminates and
prevents outbreaks obstructing circulation, and further facilitate the twisting action of the
large sheet. Furthermore, the sheet would have increased in temperature during the
rolling process also cooled. Automatic deployment is simply an inclined board shaking
back and forth at high speed. The fineness of the mesh allows only small tea particles
through, which is part of a fine spray into a container below. The rest is shaken to the
end of the table, and is taken back to the rolls, where the process is replicated. This
cycle is generally repeated at least four times.

27

Fermentation/Oxidization

Finer particles collected after breaking roll, fermented to achieve the necessary changes
to liquor palatable tea. This process can only take place when the cells are properly tea
leaf broke. Here, in the cool and dark fermentation room, an oxidizing enzyme produces
brown water left in tannin. During this process, becomes green leaf black tea. Although
this is known as fermentation was recognized throughout 1901 as an oxidation process
initiated by the enzymes of tea. The copper color characteristic aroma of fermented tea
and is an indicator of the completion of the fermentation process. It is an art of the tea
factory.
Firing & baking
The fermented leaf is next passed through a dryer to stop further chemical reactions
taking place. Passing the hot air forced through the tea leaves fermentation enzyme is
deactivated. Many organo-chemical processes are accelerated during this period, such
as before the enzymatic reactions are inactivated due to the heat. Cooking also reduces
humidity levels of tea to 2-3%. This is critical, since incomplete inactivation can
accelerate the deterioration of tea during storage.
Sorting & grading
The last step in this long process of manufacture is the selection and classification of
tea dismissed . Its importance can not be overstated , as it is here that the value of the
final product is often determined . It requires the separation of particles of tea in
"degrees " ( different shapes and sizes ) in order to comply with the rules of trade. This
process can be long and tedious , especially if a large number of degrees are made.
This is particularly true in the areas cultivated under which can be up to 12 to 15
degrees. Dried tea is classified into different grades , passing through a series of
vibrating screens of different mesh sizes ..
The various grades of tea only denote a certain size and appearance of the leaf; has no
reference to quality. Grades normally get broken dark liquor and strong tea. Grades
28

sheet in hand, are lighter and less strong color. The quality of tea is not related to the
degree .
The graded teas are finally weighed and packed in plywood boxes , bags or multi-walled
corrugated cardboard - all lined interior with foil . Each chest bag or cardboard box
representing its outline with details such as the name of the plantation, the tea grade ,
weight, invoice number and so on. This is the final process in the manufacture of black
tea and tea chests is what constitutes ' made tea '

Top tea brands in India

1 Tata Tea

2 Society Tea

3 Duncans Double Diamond Tea

29

4 Brooke Bond Red Label Tea

5 Taj Mahal Tea

6 Wagh Bakri Tea Group

30

7 Lipton Tea

8 Tetley Tea

9 Marvel Tea

.
10 Pataka Tea:

31

India tea industry present scenario

At present, tea prices have increased due to dry weather during the early part of
2012, followed by the recent floods in Assam.
In 2011 the industry produced 988 million kilos of tea and it is expected that
total production for 2012 to be the same.
Between January and July 2012, the production of tea in India was 4 percent
lower than the same period in 2011.
Demand has been steadily increasing in the meantime, and this has led to an
increase in prices of commodities such as black tea, the average price has
increased by 10 percent compared to the previous period.
In July 2012 Tea prices had increased by 18 percent compared to July 2011.
From 2001-2010 this figure was 73 INR . This will occur by the application of
black tea is more production levels.
India along with Kenya and Sri Lanka is one of the largest tea producers in the
world. If any local or climate problem alters the production of tea in these
countries, then , along with the problems of price, it could have serious concerns
for the global tea industry.
Experts have already had a serious situation with regard to the balance
between production and consumption of tea.

There has been a significant decrease in inventory as is evident from the

statistics.
India along with Kenya and Sri Lanka 60 to 62 percent of the global supply of
black tea.

India is the largest consumer of black tea and exports 17 to 20 percent of total
production compared to Kenya and Sri Lanka to export 90 to 95 percent of total
production due to smaller markets .
A portion of the tea, which is supposed to be used for exports is being

32

redirected to local consumers in India. In 2011, 192 million kilos were exported ,
but in 2016 the figure is supposed to fall to 127 million kg .
It is expected that by 2017 tea production in India will grow at a compound
annual growth rate of 1.6 percent , while for consumption in the same period , the
rate has been estimated at 1.8 percent .
At present, tea prices have increased due to dry weather during the early part of
2012 , followed by the recent floods in Assam.
In 2011 the industry produced 988 million kilos of tea and it is expected that
total production for 2012 to be the same.
Between January and July 2012 , the production of tea in India was 4 percent
lower than the same period in 2011.
Demand has been steadily increasing in the meantime , and this has led to an
increase in prices of commodities such as black tea , the average price has
increased by 10 percent compared to the previous period .
In July 2012 Tea prices had increased by 18 percent compared to July 2011.
From 2001-2010 this figure was 73 INR . This will occur by the application of
black tea is more production levels .
India along with Kenya and Sri Lanka is one of the largest tea producers in the
world. If any local or climate problem alters the production of tea in these
countries, then , along with the problems of price, it could have serious concerns
for the global tea industry.
Experts have already had a serious situation with regard to the balance
between production and consumption of tea.

There has been a significant decrease in inventory as is evident from the

statistics.
India along with Kenya and Sri Lanka 60 to 62 percent of the global supply of
black tea.

India is the largest consumer of black tea and exports 17 to 20 percent of total
production compared to Kenya and Sri Lanka to export 90 to 95 percent of total
production due to smaller markets .
33

 A portion of the tea, which is supposed to be used for exports is being

redirected to local consumers in India. In 2011, 192 million kilos were exported ,
but in 2016 the figure is supposed to fall to 127 million kg .
It is expected that by 2017 tea production in India will grow at a compound
annual growth rate of 1.6 percent , while for consumption in the same period , the
rate has been estimated at 1.8 percent .

Top tea producing states in India

The leading states with regards to tea production in India may be enumerated as below:
State
Himachal Pradesh
Arunachal Pradesh
Bihar
Darjeeling

Assam

Kerala
Sikkim
Tamil Nadu

Produce tea
Black Tea , Green Tea
Black Tea , Green Tea
Silver Needle , Jasmine Tea , White Peony Tea
Darjeeling Second Flush , Darjeeling First Flush ,
Darjeeling Black Tea , Darjeeling Autumnal Flush
Darjeeling Green Tea , Darjeeling Oolong , Earl
Grey Tea , Darjeeling In-Between , Darjeeling
White Tea , Black Tea , Fruit Black Tea , Flavored
Black Tea , Darjeeling Winter / Early Flush ,
Assam , White Tea , Irish Breakfast , Chai /
Spiced Tea , Earl Grey Tea , Black Tea , Oolong
Tea , Assam Green , Silver Needle . Green Tea
with Mint , Green Tea , Chun Mee
White Peony Tea , White Tea , Black Tea , Green
Tea
Black Tea
Black Tea

34

Indian tea industry: A SWOT analysis

With tea prices rising, the tea industry is on the upswing again after several years and
the expectation is that the trend will continue. But the industry is not without challenges.
The following is the SWOT analysis.
Strengths
The diverse agro- climatic conditions prevailing in the tea growing areas of India
are provided for producing a wide range of teas - black , (CTC , Orthodox ) ,
green tea and organic tea .
A one-stop -shop for high quality specialty teas such as Darjeeling , Assam
orthodox high end Nilgiris, etc.
Strong production base with 75 percent of production is explained by organized
sector covering 1,600 landscaped property of nearly 1,100 institutions .
competent management staff .
strong research backing of well-established research institutions . Availability of
facilities modernized and improved manufacturing .
Labour Welfare Laws protecting workers.
Emerging smallholder sector, with profiles of young plantations . Availability of
training facilities for plantation managers , supervisory staff and workers and
continuous updating of their knowledge. Strong domestic market - thus
representing almost 80 percent of the production featuring cushion for the tea
industry demand

35

Weaknesses
Aging tea bushes - about 38 percent have crossed the economic threshold limit
of age 50 years and 10 per cent to cross this limit soon. High cost of production
mainly due to low productivity , high cost of energy and the high burden of social
cost.
Decreased availability of labor especially in southern India. Remote location of
plantations and transport of long-distance tea gardens tea outlets . Lack of
infrastructure - access roads to the gardens , improper storage ports, the limited
availability of containers , placements of ships and transportation costs offshore
(due to vessel transfers power from the mother ) .
Difficulties in introducing mechanization of field operations due to topographical
constraints and quality .
Weak extension service - unorganized smallholders with small and scattered
fragmented properties leading to the production of low quality tea mainly due to
the lack of availability of expertise in the door character.
Lack of quality control mechanism particularly for teas sold through private
sales .
Opportunities
Good level of awareness of the world in terms of health attributes of tea leading to
growing demand for good quality tea and specialty teas and organic teas, green teas.
Specify the gap between supply and demand due to the increase in the growth rate of
consumption in the major producing countries. Producing countries to agree to the
formation of an exclusive forum to resolve their differences on issues of common
interest.
Positive response from the tea industry respond to the Government for the renewal of
the fields and processing factories. (Special Purpose Tea Fund and initiative and
updating of quality).
The increased strength of small producers and showing a good response to the
suggestion of the Tea Board collective approach towards the adoption of BPA and BPM

Threats
The production in countries such as Sri Lanka, Vietnam Round-the-year. Low cost of
tea production in Kenya, Vietnam and Indonesia, etc.
Minors bushes (better quality tea) from other producing countries.
Consistency in the commitment to quality and high perceived quality of service
exporters from other countries.
Better developed packaging and bagging ability Sri Lanka

36

PORTER'S FIVE FORCES MODLE:

Industry Rivalry (High):

There are approximately700 tea companies in India, so there is an intense
rivalry between them.
Market is dominated by a large number of unorganized players
The industry growth is slow
There are low switching costs.

Bargaining Power of Buyers (High):

There are a large number of buyers who buy the product
The bargaining power of buyers is high and buyers have many options available.
Not much product differentiation in terms of taste also inexpensive switching.
Buyers purchase a large proportion of the total output of the industry
Bargaining Power of supplier (Low):
There are a number of tea products in India
Like coffee substitute are available
Product Provider create low-cost switching
37

Threat of substitute (moderate):

Substitutes coffee, cold drinks, juice.

Existing consumers are loyal.

Substitutes price may be lower. As there are so many player in the industry a
price war is unavoidable.
The substitute product quality & performance may be better.

Threat of new Entrance (high):

Large untapped rural market for branded tea segment in rural India and Indian
tea in global market.

Encouraging government policies like food & beverage act.

Tea Production April to September 2012-2013

The data show trends in the State wise production of tea in India given time period. Tea
production in Assam state has over other states. In the period September 2012 tea
production has fallen by 2.8% since August 2012. Tea production in the country rose
marginally 690.31million kg in the first half of the financial year on the back of increased
production in northern India. The country produced 688.67 million kg of tea in April and
September 2011 at 12. Tea production in north India, comprising the main teaproducing regions of Assam and West Bengal rose 1% to 562.67 million kg in AprilSeptember 2012-13 compared to 559.82 million tax kg in the previous year.

Tea Production April to September 2012-2013

Districts / States

(Million Kgs.)

During Aug

During Sept

Apr-Sept

2012

2011

2012

2011

2012-13#

2011-12#

Assam Valley

83.91

78.62

82.83

83.74

352.06

352.16

Cachar

7.51

7.20

7.99

7.13

33.78

31.66

Total Assam

91.42

85.82

90.82

90.87

385.84

383.82
38

Darjeeling

1.73

1.39

1.37

1.57

7.44

7.36

Dooars

24.47

22.88

24.51

22.87

100.99

105.79

Terai

15.10

14.77

15.01

14.00

62.11

56.50

Total W.Bengal

41.30

39.04

40.89

38.44

170.54

169.65

Others

1.52

1.53

1.52

1.53

6.29

6.35

Total North India

134.24

126.39

133.23

130.84

562.67

559.82

Tamil Nadu

12.79

12.54

11.13

12.47

91.26

92.25

Kerala

5.30

3.85

4.53

4.76

33.63

33.93

Karnataka

0.26

0.30

0.36

0.32

2.75

2.67

Total South India

18.35

16.69

16.02

17.55

127.64

128.85

All India

152.59

143.08

149.25

148.39

690.31

688.67

Chart :

39

Export of Tea 2011-12 to 2012-13

Data from the Tea Board of India show that last year, tea production in the
country was set at 1,126 million kg.
During January and August, tea production has increased by 6.2 percent to 705
million kg, compared to 664 million kg in the corresponding period last year.

In 2012, the total supply of tea, including imports, was of 1,147 million kg, while
total demand, including exports, was 1.096 million kg, according to the Tea
Board of India
.
With a growth of about 5 percent for the year, this will result in the production of
about 1.180 million kg.
Along with the importation of 20 million kilos, the total supply of tea would be
about 1,200 million kg this year
In the first quarter January to March 2013 , exports increased by approximately
34 percent to 59.8 million kg . "Even if exports increase by 15 percent compared
to last year , we would have over 900 million kilos of tea left for domestic
consumption ,
After a decline in tea exports last year, shipments abroad Drink up this year
(2013 ) , according to the Tea Board of India. Export of tea is scheduled to touch
220 million kg in 2013 due to good demand from Iran and CIS countries.
Last year , in 2012 , exports had fallen to a low of 210 million pounds 215
million pounds in 2011. Decrease in export in 2012 was largely due to problems
in Iran due to sanctions led United States against the country over its nuclear
program . But the demand for tea worldwide is increasing and prices are
expected to realize during the year

40

Production
During 2011-12, the total tea production increased from 129 million kg in 2010-11 due to
better climatic conditions that prevailed in major tea producing areas in northern India.
During 2012-13 (April-December) tea production was estimated at 1,037,430,000
against 1,021,150,000 kgs kgs compared to the corresponding period last year.

Production of Tea in India during last three financial years (in million kgs)
Year
2009-10
2010-11
2011-12

North India
734.38
728.52
865.59

South India
256.80
238.21
229.87

All India
991.18
966.73
1095.46

Exports
During 2011-12 exports remained at the same level as last year. The total volume of
exports in 2011-12 was 214 million kilos, compared to 214 million kg in 2010-11.
However, the highest unit price, the total value of exports in 2011-12 was significantly
higher than the previous year. Total foreign exchange earned during 2011-12 was Rs.
Rs 3.305 million with an average unit price of Rs.154 per kg compared to Rs. Rs 2.996
million in 2010-11, with an average price of Rs.140 per kg. Despite a weakening rupee,
profits and unit prices in U.S. dollar terms were also higher in 2011-12 compared to the
previous year. In summary, the position is a comparative table.
Table
2011-12 (Provisional)

2010-11

Unit
Value Value Unit
Unit
Value Value
Unit
Qty
Price
Qty M.Kgs Rs.
M.US Price Price
Rs.
M.US
Price
M.Kgs
Rs.
Crore. $.
Rs./Kg. ($/Kg)
Crore. $
($/Kg.)
Kg
214 3305 690 154
3.22 214 2996 658 140 3.08
During 2011-12, the improvement in exports was compared to countries like
Kazakhstan, UK, USA, Egypt and Pakistan. The increase varies from 3% (U.S.) to 16%
(Egypt). Markets such as Russia, Kazakhstan, UK, USA, Iran, UAE, ARE (Egypt) and
Pakistan remained crucial, considering the market potential and the ability of India to
meet market demand respective.
During 2012-13 (April-December) exports are estimated at 156.38 million kgs valued at
Rs. 3062.69 crore with a price of Rs.195.85 per kg against 169.65 million kgs valued at
Rs. 2617.57 crore with a price of Rs.152.04 per kg during the corresponding period last
year.
41

42

Analysis of Indias Trade in Tea

Export Of Tea
Year
20112012
20122013

Quantity (M kg)
Value (Rs.Crore)
Unit Price (Rs/Kg)
Jul-Sep Apr-Jun Apr-Sep Jul-Sep Apr-Jun Apr-Sep Jul-Sep Apr-Jun Apr-Sep
39.37 63.05

102.62 598.65 961.58 1560.23 151.29 152.51 152.04

30.70 51.15

81.85

528.29 979.23 1507.52 172.08 191.44 184.81

Tea Development
One of the important functions assigned to the Board of tea in the Tea Act includes the
formulation and implementation of development plans for increasing production and
productivity of tea plantations , modernization of tea processing , packaging and
facilities value addition and promotion of cooperative efforts among small tea growers .
Financial assistance for the above activities extending through plan approved for
implementation plans. Activities supported during the XI Plan period include uprooting
and replanting / rejuvenation of old tea bushes old building irrigation and transport
services , new plantations in mountainous regions NE and small farms the
collectivization of smallholders through SHGs groups / Producer, training,
demonstration , field trips, etc. modernize tea factories processing , value addition ,
quality certification , stimulating the production of orthodox teas and green . Total
subsidy paid during the period of the XI Plan was Rs.515 Cr . ( Approx.) . The physical
achievement over the past five years is on the table

43

Table
The physical achievements during the last five year plan period
Sl.
Activity
No
1 New Planting (Ha)
2 Irrigation (Ha)
3 Transport (Nos)
4 SHG of small growers (Nos)
5 Replanting (Ha)
6 Rejuvenation (Ha)
7 Factory Modernization (No.)
8 Value Addition (No.)
9 Quality certification (No.)
10 Product Diversification (No.)
Orthodox subsidy ( Vol.
11
M.Kg.)
12 Training (No. of persons)

Achievement during XI Plan

period
3,738
27,427
543
250
25,195
6,817
1,485
142
224
3
465
49,689

Achievements during 2012-13

The above noted activities have been continued during the year 2012-13 as well. The
financial and physical progress up to December 2012 are as at Table
Table
Financial Achievement during 2012-13 from April to December 2012

Scheme Name

Approved
Outlay for
2012-13 (Rs.
crore)

Tea Plantation
Development
10.00
scheme
Quality Upgradation
& Product
45.00
Diversification
Scheme

Expenditure (Rs..
Receipt
crore) (April to
(Rs.crore)
December 2012)
8.12

8.10

30.64

29.87

44

Research &
Development
Scheme
Human Resource
Development
Scheme
Market Promotion
Scheme
Orthodox Subsidy
Scheduled CasteSub Plan
Small Growers
Development
Scheme
National
Programme on Tea
Regulation
Special purpose
Tea fund scheme
Total

12.00

9.00

8.95

12.00

12.12

12.10

26.00

19.93

19.90

25.00

19.09

19.00

10.00

2.75

2.74

0.10

0.00

0.00

0.10

0.00

0.00

60.00

42.51

42.49

200.20

144.16

143.15

Table
Physical Targets & Achievements for the period 01.04.2012 to 31.12.2012
Activity
1
2
3
4
5
6

New Planting (ha)

Irrigation (ha)
Transport (no.)
SHG (no.)
Replanting (ha)
Rejuvenation (ha)
Factory Modernisation
7
(no)
8 Value Addition (no)
9 Quality Certification (no)
Orthodox subsidy (Vol in
10
M.kg)
11 Number of beneficiary
12 Training (No. of persons)

Percentage
Achieved
36.76
32.68

Target

Achievement

1500
4000
25.00
6000
1000

551.39
1307.29
41
12
2802.66
807.05

350

192

54.86

13
110

6
7

46.15
6.36

95

35

36.84

400
5000

350
715

87.50
14.30

48.00
46.71
80.71

45

Spain
Spain is a small tea consumption and the growth rate for consumption of green tea on
the market exceeds the consumption of black tea. India also seems to export tea to
Spain very less used for commercial purposes.
Spain is a country of coffee consumption. As a result, the tea does not have a great
tradition in Spain, although the demand for which is increasing (while coffee sales fall).
There is a particularly good range of teas in the halls of Granada Moroccan tea.
Coffee in Spain have a few boxes of bags gathering dust next to the clock on your
abacus, pen and pocket but is always of very poor quality. However, there are some
fruit and herbal infusions which are very popular.
Spanish used type of tea is following
T Negro - Black tea. Doesn't come with milk
T Rojo - Pu-erh tea.
T Verde - Green tea.
T de Fruta - Fruit tea.
Manzanilla - Chamomile tea.
Menta Poleo - Pennyroyal tea.
Tila - Lime blossom tea.
Tea in Granada and Lavapies (Madrid)
The influence of Morocco in Granada has created a bit of tea culture in the city. There
Arabs " tearooms " ( tea houses ) throughout Granada with menus that are usually five
pages. It is also common that the streets outside these tea houses to sell packages of
the most common teas that you can buy in stores. One tip - try the tea in tea houses ,
but do not buy from there. Instead , go to the spice stalls around the Cathedral (there
are two of them). The tea here is of a much higher quality than that sold in Arab areas
and is also cheaper.
The menus at once are rare teteras English : just pick something random ! My favorite
is the tea Pakistan, a black tea with milk is taken and mixed with vanilla, cinnamon and
cardamom pods .
Lavapies neighborhood of Madrid.
The Tea Shop of East West Company was one of the first in Spain tea shops that
exclusively sell tea and tea accessories . Today about 120 varieties of tea are sold.
The Tea Shop is slowly opening new lines of business as the distribution of the butt end restaurants and hotels. There are even plans to repeat the positive Spanish
Spain is a small tea consumption , with a market share of 0.5% in 2008 ( ITC , 2009).
46

between 2004 and 2008 , total consumption of tea Spanish achieved an average annual
increase of 3.2 %, to 1,400 tones in the last year

Strategy
Export strategy was used. In Spain, the black tea and green tea is the most demand.

Procedure of export
STEP1: Enquiry

The starting point for any Export Transaction is an enquiry.

An enquiry for product should, inter alia, specify the following details or
provide the following data

Size details - Std. or oversize or undersize

Drawing, if available

Sample, if possible

Quantity required

Delivery schedule

Is the price required on FOB or C& F or CIF basis

Mode of Dispatch - Sea, air or Sea/air

Mode of Packing

Terms of Payment that would be acceptable to the Buyer - If the buyer

proposes to open any Letter of Credit, any specific requirement to be
complied with by the Exporter

Is there any requirement of Pre-shipment inspection and if so, by which

agency
Any Certificate of Origin required - If so, from what agency

STEP 2: - Proforma generation :

After studying the enquiry in detail, the exporter - be it Manufacturer Exporter or
Merchant Exporter - will provide a Proforma Invoice to the Buyer.
STEP 3: Order placement :
If the offer is acceptable to the Buyer in terms of price, delivery and payment terms, the
Buyer will then place an order on the Exporter, giving as much data as possible in terms

47

of specifications, Part No. Quantity etc. (No standard format is required for such a
purchase order
STEP 4: Order acceptance :
It is advisable that the Exporter immediately acknowledges receipt of the order, giving a
schedule for the delivery committed.
STEP 5: Goods readiness & documentation :

Once the goods are ready duly packed in Export worthy cases/cartons
(depending upon the mode of despatch), the Invoice is prepared by the
Exporter.
If the number of packages is more than one, a packing list is a must.
Even If the goods to be exported are excisable, no excise duty need be charged
at the time of Export, as export goods are exempt from Central Excise, but
the AR4 procedure is to be followed for claiming such an exemption.
Similarly, no Sales Tax also is payable for export of goods
STEP 6: Goods removal from works :

There are different procedures for removing Export consignments to the Port,
following the AR4 procedure, but it would be advisable to get the
consignment sealed by the Central Excise authorities at the factory premises
itself, so that open inspection by Customs authorities at the Port can be
avoided.
If export consignments are removed from the factory of manufacture, following the AR4
procedure, claiming exemption of excise duty, there is an obligation cast on the exporter
to provide proof of export to the Central Excise authorities
STEP 7: Documents for C & F agent :

The Exporter is expected to provide the following documents to the Clearing &
Forwarding Agents, who are entrusted with the task of shipping the
consignments, either by air or by sea.
Invoice
Packing List
Declaration in Form SDF (to meet the requirements as per FERA) in duplicate.
AR4 - first and the second copy
Any other declarations, as required by Customs
On account of the introduction of Electronic Data Interchange (EDI) system for
processing shipping bills electronically at most of the locations - both for air or
sea consignments - the C&F Agents are required to file with Customs the
shipping documents, through a particular format, which will vary depending
on the nature of the shipment. Broad categories of export shipments are:
48

Under claim of Drawback of duty

Without claim of Drawback
Export by a 100% EOU
Under DEPB Scheme
STEP 8: Customs Clearance :
After assessment of the shipping bill and examination of the cargo by Customs (where
required), the export consignments are permitted by Customs for ultimate Export. This
is what the concerned Customs officials call the LET EXPORT endorsement on the
shipping bill.
STEP 9: Document Forwarding :

After completing the shipment formalities, the C & F Agents are expected to
forward to the Exporter the following documents:
Customs signed Export Invoice & Packing List
Duplicate of Form SDF
Exchange control copy of the Shipping Bill, processed electronically
AR4 (original duplicate) duly endorsed by Customs for having effected the Export
Bill of Lading or Airway bill, as the case may be
STEP 10: Bills negotiation :

With these authenticated shipping documents, the Exporter will have to negotiate
the relevant export bill through authorized dealers of Reserve Bank, viz.,
Banks.
Under the Generalized System of Preference, imports from developing countries
enjoy certain duty concessions, for which the exporters in the developing
countries are expected to furnish the GSP Certificate of Origin to the
Bankers, along with other shipping documents.
Broadly, payment terms can be:
DP Terms
DA Terms
Letter of Credit, payable at sight or payable at... days
Step11: Bank to bank documents forwarding :

The negotiating Bank will scrutinize the shipping documents and forward them to
the Banker of the importer, to enable him clear the consignment.
It is expected of such authorized dealers of Reserve Bank to ensure receipt of export
proceeds, which factor has to be intimated to the Reserve Bank by means of periodical
Returns.

49

STEP 12: Customs obligation discharge :

As indicated above, Exporters are also expected to provide proof of export to the
Central Excise authorities, on the basis of the Customs endorsements made on the
reverse of AR4s and get their obligation, on this score, discharged.
STEP 13: Receipt of Bank certificate :

Authorized dealers will issue Bank Certificates to the exporter, once the payment
is received and only with the issuance of the Bank Certificate, the export
transaction becomes complete.
It is mandatory on the part of the Exporters to negotiate the shipping documents only
through authorized dealers of Reserve Bank, as only through such a system Reserve
Bank can ensure receipt of export proceeds for goods shipped out of this country

How to Get an Export License in India

Export Licence
Majority of goods are allowed to be exported without obtaining a licence. Export
licenses are only required for items listed in the Schedule 2 of ITC (HS) Classifications
of Export and Import items. An application for grant of Export Licence for such items
must be submitted to the Director General of Foreign Trade (DGFT). The Export
Licensing Committee under the Chairmanship of Export Commissioner considers such
applications on merits for issue of export licenses.
Export of Special Chemicals, Organisms, Materials, Equipment and Technologies
(SCOMET) items are also permitted under a licence or prohibited altogether. Guidelines
for Export of SCOMET items can be viewed here..
Export of Samples
Export of samples upto specified limits are allowed free. The exporter is required to be
registered with the appropriate Export Promotion Council to avail of this benefit.
Samples with permanent marking as "sample not for sale" are allowed freely for export
without any limit.
Processing of Shipping Bill
In case of export by sea or air, the exporter must submit the 'Shipping Bill', and in case
of export by road he must submit 'Bill of Export' in the prescribed form containing the
prescribed details such as the name of the exporter, consignee, invoice number, details
of packing, description of goods, quantity, FOB value, etc. Along with the Shipping Bill,

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other documents such as copy of packing list, invoices, export contract, letter of credit,
etc. are also to be submitted. There are 5 types of shipping bills:

Shipping Bill for export of duty free goods. This shipping bill is white coloured.
Shipping bill for export of goods under claim for duty drawback. This shipping bill
is green coloured.
Shipping bill for export of duty free goods ex-bond i.e. from bonded warehouse.
This shipping bill is pink coloured.
Shipping Bill for export of dutiable goods. This shipping bill is yellow coloured.
Shipping bill for export under DEPB scheme. This shipping bill is blue in colour.

The Bills of Export are:

Bill of export for goods under claim for duty drawback

Bill of export for dutiable goods
Bill of export for duty free goods
Bill of export for duty free goods ex-bond

Exporters can check and track the status of Shipping Bills online.
Let Export Order
After the receipt of the goods in the dock, the exporter may contact the Customs Officer
designated for the purpose and present the checklist with the endorsement of Port
Authority and other declarations along with all original documents. Customs Officer may
verify the quantity of the goods actually received and thereafter mark the Electronic
Shipping Bill and also hand over all original documents to the Dock Appraiser, who may
assign a customs officer for the examination of the goods. If the Dock Appraiser is
satisfied that the particulars entered in the system conform to the description given in
the original documents, he may proceed to allow "let export" for the shipment.

HOW TO START AND OPERATE YOUR OWN PROFITABLE

IMPORT/EXPORT BUSINESS AT HOME

Making Contacts

Analyze the Market

Where to Find Help

Making Connections

Getting the Goods

Making an Agreement
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The Sale

Terms of Shipping

The Freight Forwarder

The Letter of Credit

Delivering the Goods

INDIA-SPAIN RELATIONS
Relations between India and Spain are cordial, particularly since the establishment of
democracy in Spain in 1978. Diplomatic relations between India and Spain were
established in 1956 with the opening of the Spanish Embassy in New Delhi which was
followed by concurrent accreditation of our High Commissioner to London as
Ambassador to Spain in 1958. A Mission headed by a CdA opened in Madrid the same
year. The first resident Ambassador of India was appointed in 1965.
High Level Visits
In recent years India Spain bilateral relations have gathered momentum through high
level visits and regular ministerial and official level contacts. His Majesty King Juan
Carlos I paid a state visit to India from 24-27 October 2012. The King was accompanied
by a high level delegation, including Spanish Ministers of Foreign Affairs; Defence;
Industry, Energy and Tourism; Infrastructure and Transport. The delegation also
included senior government officials and CEOs of about 20 top-notch Spanish
companies.
During the visit the following Agreements/MOUs were signed:
1. Protocol for amending the Convention and Protocol between India and Spain for
the avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income and on capital, which was signed on February 8, 1993 in
New Delhi.
2. Memorandum of Understanding on Defence Cooperation.
3. Memorandum of Understanding on Roads and Road Transport Sector.
4. Agreement between India and Spain in the field of Audio-visual Co- production
5. Memorandum of Understanding between the Indian Railways and
RENFE- OPERADORA and ADIF of Spain on technical cooperation in the field of
railway sector.
President Smt. Pratibha Devisingh Patil paid a State Visit to Spain from 20-23 April,
2009 at the invitation of the King of Spain. This was the first-ever State visit from India
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to Spain. During the visit, three MoUs on cooperation in the fields of Agriculture,
Renewable Energy and Tourism were signed. Seven areas viz. infrastructure,
agriculture, tourism, cooperation in Latin America, renewable energy, SMEs and
research and development in S&T were identified as focus areas for strengthening
bilateral cooperation.

Bilateral Agreements and Treaties

India has the following treaties/agreements with Spain.

Agreement on Trade and Economic Cooperation (1972)

Agreement on Cultural Cooperation (1982). The CEP for the period 2005-08 was
signed in March 2005
Civil Aviation Agreement (1986).
Double Taxation Avoidance Agreement (1993).
Bilateral Investment Protection and Promotion Agreement (1997).
Extradition Treaty (2002)
MoU on Institutionalization of Political Dialogue (2006)
Mutual Legal Assistance treaty on Criminal Matters (2006).
MoU between Technology Development Board (TDB) and the Centre for
Development of Industrial Technology (2006).
MoU of cooperation in the field of S&T (2007)
MoU on Agriculture and Allied Fields (April 2009)
MoU on cooperation in Tourism (April 2009)
MoU on Renewable Energy(April 2009)
Protocol for amending the Convention and Protocol between India and Spain for
the avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income and on capital, which was signed on February 8, 1993 in New
Delhi. ( October 2012)
Memorandum of Understanding on Defence Cooperation. (October 2012)
Memorandum of Understanding on Roads and Road Transport Sector. (October
2012
Agreement between India and Spain in the field of Audio-visual Co-production
(October 2012)

Trade and Investment

India-Spain bilateral trade in the year 2012 stood at USD 5.17 billion (Exports from
India: USD 3.56 billion; imports from Spain: USD 1.61 billion).

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Bilateral Trade between India and Spain from January to November, 2013 stood at USD
4.33 billion; Spains exports to India during the given period stood at USD 1.36 billion
and Indias exports to Spain stood at USD 2.96 billion.
There has been a drop of 10.8% in the bilateral trade as compared with the same period
in 2012, which stood at USD 4.86 billion.
The drop in bilateral trade is mainly due to reduced imports by Spain in a time of
economic downturn.
Main Indian exports included organic chemicals, textile and garments, Iron and steel
products, automotive components, marine products, leather goods. Indian imports
consisted of machine and mechanical appliances, vehicles and automobiles, plastic
manufactures, electrical appliances, rubber and rubber products and olive oil.
Spain is the 13th largest investor in India with total FDI at $820 million.
The main investments are in the sectors such as infrastructure, renewable energy, auto
components, water desalination/purification and single brand retail.
A total of 140 Spanish companies have subsidiaries, joint ventures, projects or liaison
offices and purchase offices in India.
There are about 30 Indian companies in Spain in the fields of IT, automobiles,
pharmaceuticals and road maintenance.
The total Indian investment in Spain is at Euro 687 million. In areas of infrastructure
(roads, airports, ports, railways), energy (renewable and non-renewable), agriculture,
food processing, water desalination/purification, city waste management and tourism
there is a huge potential for cooperation from Spain to India. Similarly, from our side
there is a huge potential for cooperation in the areas of pharmaceuticals (generic
medicines) and IT.

Science and Technology

Spain was the Partner Country at the 17th edition of the Technology summit and
Technology Platform organized by our Department of Science and Technology in New
Delhi from 22 23 November, 2011.
Main thematic areas for this years edition were biotech, renewable energy and waterrelated technologies.

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About 127 Spanish companies and 250 Indian companies participated in the
Summit. About 127 MOUs were also signed between the various Spanish and Indian
participating companies.
The Technology Summit was inaugurated by the Honble Minister of Science &
Technology.
The Spanish delegation was led by Mr. Jun Toms Hernani Burzaco, Secretary
General of the Spanish Ministry of Science & Innovation.
The Department of Biotechnology (DBT) has an on-going programmed of cooperation
with the Centre for the development of Industrial Technology (CDTI), Spain.
A Programmed of Cooperation for Technological cooperation was signed between the
two bodies in November, 2011 to promote and fund innovation-driven research and
technology development as well as to encourage partnerships and business led R &D
collaborative projects in the field of biotechnology
Under this programmed DBT and CDTI have successfully concluded one round of call
for proposals and have announced second call for proposals
A 17- member delegation comprising of officials of DBT, representatives of Academia,
Industry and FICCI visited Madrid and Barcelona from May 20-22, 2013.
The delegations had useful interactions with their Spanish counterparts and visited
state of the art Spanish bio-tech centers and facilities.

Cultural and Academic Relations

Cultural exchange is an important component of India-Spain bilateral relations.
Cultural performances, film shows and exhibitions are regularly organized to strengthen
mutual understanding of the societies.
Academic exercises like seminars and colloquiums facilitating study of each others
history and culture and the provision of scholarships play an important role in this matrix
ICCR sponsors visits of cultural troupes for performances in various parts of Spain.
Further, ICCR offers five scholarships to Spanish students every year to study in India.
The Indian performing arts scene has become increasingly vibrant in Spain over the
past few years.
After the successful organization of India en Concierto in 2012, the momentum was
taken further up in 2013 through performances of very high quality including those by
Ms Priya Venkataraman and Group (Bharatnatyam), Pt. Ashok Pathak and Pt. Baluji
55

Srivastava (Sitar), Dr. L Subramaniam and ensemble (Violin), Shri Astad Deboo and
Group (Contemporary Dance), amongst others. Shri Deboo and Group also performed
in Andorra, which was the first performance by an Indian cultural group in Andorra.The
13th Edition of the ImagineIndia Film Festival took place in Madrid, Barcelona and
Bilbao. More than 50 films were screened throughout the festival, including 26 from
India..

PROMISING SECTORS OF INDO-SPANISH COOPERATION

Science and Technology
Energy (particularly wind energy, where Spain and India are respectively the third and
the fourth largest producers in the world)
Information and Communication Technology
Biotechnology including Pharmaceuticals, Life Sciences and Nano Technology
Agriculture Technology & Food Processing
Infrastructure
Environment & Tourism

Current Scenario
With an annual bilateral trade involving $5 Billion, trade partnership between India and
Spain.
In recent times, where we have been witnessing an increasing volatility in Euro zone
and an imminent global financial crisis, a story like this comes as a breath of fresh air
and needs worth mentioning.
Notwithstanding all the economic turmoil of recent past, the Indo-Spanish trade is
poised to grow at around 20% in the coming years.
In a recent survey published by Indian embassy in Madrid, trade balance between the
two countries has hovered around $2000 Million mark year-on-year: a clear indication of
56

growing interest of Spain to seek new partners in emerging economies like India and
also an indication of Indian Governments persistence of continuing with economic
liberalization policy that started about two decades ago.
Presently, there are around ten major Spanish companies working in India.
Sectors where tie-up and expansions are happening in Indian market are consumer
goods, travel, tourism, energy, banking, construction and retail, with renewable energy
being most dominant among them.
Indian companies have also entered the Spanish market in Pharmaceuticals, IT
Services, Energy and automobile industries. Financial sector has been identified as
major growth area of India.
Apart from these, following sectors have been identified as, priority sectors where IndoSpanish joint ventures can happen in the future: Infrastructure, energy, agriculture,
automobile components, information Technology, pharmaceuticals, textile and tourism.

What does India offer to Spain and rest of the world?

After years of stagnation due to Socialist policies, Indian economy breathed a new lease
of life in early 90s, when the then finance minister (Dr. Manmohan Singh) introduced
sweeping reforms in various sectors.
In the following years, Indian economy has witnessed huge spells of GDP growth
(almost touching double digit in 2000s and currently estimated to be 8.8% for 2011),
increasing interest of multinationals to invest in the country, resulting in rising levels of
living standards
Conditions for doing business for international companies remain positive.
India has potential to emerge as an important partner for alleviating the trade
imbalances and providing attractive investment incentives:

India is 4th largest economy in the world in terms of PPP

70% of foreign investments are making profits
84% plan to expand
91% perceive new opportunities for investments
60% of the companies are obtaining better margins in their businesses in India
than their average in their global businesses
220 of Fortune 500 are present in the Indian market
Indian Economy: Service: 58%, Agriculture: 20%, Industry: 19%
Forex reserves in India: $320 Billion
FDI attractiveness: among top 5 in the world
As per BCG study, banking sector will be third largest in the world in next 14
years
Growth of India is based on internal demand
India ranks among highest in consumer confidence
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Current and Future Challenges

Despite the booming business relations between the two countries, Indian companies
expanding into Spain and vice versa, need to be aware of the language barriers and the
cultural differences that exist between the two countries.
English is the business language used in India and the focus on learning Spanish for
business is almost non-existent.
English is now the second language taught in Spanish schools (moving from French),
which implies that language would cease to be a big barrier in the near future.
Cultural sensitization is a topic, which can be dealt easily, if identified and recognized in
time.
All the experts on the panel agreed that the best way to enter either market is through
Joint Ventures in a specific industry as a testing ground.
The lessons learnt from these ventures can serve as a benchmark for doing business
with each other
This helped them understand the local market and test waters for entering into the
Power transmission business and explore other avenues of engagement.

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Bibliography
www.teaboard.gov.in
www.indianbudget.nic.in
www.mapsofworld.com
www.studymode.com
www.portal.indiainfoline.com
www.onicra.com
www.commerce.nic.in
www.tea.in/industry
www.ibet.org/export/india-teaindustry
www.wikipedia.com
www.financialexpress.com

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