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Lanka’s crisis powers 22% spike in Indian tea exports

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Orthodox tea exports from India have increased by more than 22 percent during the first six months of the calendar year as its largest supplier, Sri Lanka, grapples with an economic crisis, Indian media reports say.

A report published by the Business Standard has said: “According to the latest data available on the Tea Board India website, tea exports from India, during January-June 2022, stood at 96.89 million kg, up by 10.43 million kg (mkg) over the same period last year. Much of the increase was from the orthodox segment, whose exports rose by 8.92 mkg to stand at 48.62 mkg. The increase in exports of CTC tea, on the other hand, was just about 0.80 mkg.The increase in orthodox exports is significant and it’s on the back of the deficit in Sri Lanka, said Kaushik Das, vice president, Icra.

“On an annual basis, Sri Lanka has seen a drop of about 19 percent in production. If this deficit remains, then we are looking at 60 mkg of lower production for the full year. And that is the total orthodox production in North India,” he pointed out.

Orthodox tea refers to loose-leaf tea, produced using traditional or orthodox methods such as plucking, withering, rolling, oxidation and drying. CTC tea is processed using the crush, tear and curl method.

Sri Lanka accounts for about 50 percent of global trade in orthodox teas. According to sources in the Tea Board, exports from India are expected to pick up further in the second and third quarters which will help meet the target of 240 mkg by the end of the year. In 2021, total tea exports from India stood at 196.54 mkg.

“The markets that have been vacated by Sri Lanka is where our teas are going at the moment. Going by the current trend, orthodox will see heightened demand,” the sources added.

The Tea Board, in fact, is planning to encourage more orthodox production by trying to incentivise it in its upcoming plans. Out of a total tea production of 1,344.40 mkg in 2021-22, orthodox production was 113.07 mkg.Data available on Tea Exporters Association Sri Lanka showed that January-July 2022, cumulative production totaled 153.03 mkg, recording a significant decrease of 35.07 mkg vis-à-vis 188.10 mkg during January-July 2021. It mentioned that the production is the lowest for the period since 1996.

India is reaping the benefits from the shortfall. Sri Lanka’s top five markets are: Iraq, UAE, Russia, Turkey and Iran. The major gains for India during January-June have come from UAE at about 9.1 mkg.

“UAE is mainly a re-exporting hub and much of the teas goes to Iran and CIS,” said Azam Monem, director, McLeod Russel India. “We will end the year with 10-15 per cent higher exports. We always exported to the UAE, which we will continue doing. Other major destinations for us will be the UK, US, Canada, and Germany,” he added.

Himanshu Shah, chairman M K Shah Exports, said that Iran had been very active this year resulting in almost 45-50 per cent higher prices of orthodox teas compared to last year.

“The January-June figures, however, don’t fully reflect the extent of buying as Iran mostly buys quality tea of second flush,” he said. The second flush comes to the auction towards the end of June.

“Exports to Russia will pick up in the third and fourth quarter,” Shah added.

The increase in exports to Iran during January-June was 1.39 mkg. “The demand for orthodox is booming. India has made inroads into Sri Lanka’s markets, the challenge is to retain the hold once the island nation returns to normal crop production,” said Anshuman Kanoria, chairman, Indian Tea Exporters Association.

In the last 2-3 weeks, however, orthodox prices have come off from its peak levels. “There is increased supply in the market and tea prices have gone up which is resulting in cash flow problems for exporters. Everyone has limited finance and that is a slight roadblock to increasing exports further,” Kanoria explained.The top two markets for Indian tea are Russia and Iran. Exports to Russia during January-June stood at 14.76 mkg as against 15.88 mkg in the same period of 2021.

Dipak Shah, chairman, South India Tea Exporters Association, said, in the last one month, buyers from Russia have been very active. “With the regular buyers, there is not much issue with payments though arrivals in Russia are still erratic. As of now, things are moving in the right direction.”



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President chairs 2027 Pre-Budget talks on Agriculture Ministry

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A discussion to review the progress of projects being implemented under the 2026 budget allocations for the Ministry of Agriculture, Livestock, Land and Irrigation, and to consider the Ministry’s budgetary requirements for 2027, was held on Tuesday (07)  morning  at the Presidential Secretariat under the chairmanship of President Anura Kumara Dissanayake.

During the meeting, the progress of projects implemented in 2026 by institutions under the Ministry, including the Department of Agriculture, the Department of Agrarian Development, the Department of Export Agriculture and the Institute of Post-Harvest Technology (IPHT), was reviewed individually. Attention was also focused on institutions requiring restructuring to enhance efficiency and effectiveness.

The President instructed that all irrigation projects maintained by various institutions, departments and local authorities should be regulated through a single district-level unit. He also directed that irrigation rehabilitation projects being implemented across the island be comprehensively mapped.

Emphasising the need to maximise the utilisation of funds allocated under the 2026 Budget, the President instructed officials to further promote concessionary bank loan facilities available to young entrepreneurs in the agriculture and industrial sectors.

The President also instructed officials to submit a report containing proposals for the integrated and systematic management of extension services currently operating under various ministries. He further highlighted the importance of holding separate discussions on individual subject areas to ensure seamless coordination between the Provincial Councils and the Central Government.

The President also directed officials to submit new proposals and projects aimed at promoting export agricultural crops and increasing the value of related products.

The meeting also reviewed projects launched in recent years with foreign loan assistance. As many had exceeded their scheduled completion dates, the President instructed officials to expedite their completion. He further emphasised that, in future, no project financed through foreign loans should be approved without a clear understanding of its intended outcomes.

It was also noted that the Government had incurred a significant financial burden due to the failure to complete certain projects initiated in previous years within the stipulated timeframe. Accordingly, it was decided to review projects that had not been completed on schedule.

The discussion also highlighted the importance of replacing outdated projects and programmes that have continued for many years without delivering tangible results with more productive agricultural programmes.

Minister of Agriculture, Livestock, Land and Irrigation K.D. Lalkantha; Minister of Labor and Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando; Deputy Minister of Agriculture and Livestock Namal Karunaratne; Deputy Minister of Land and Irrigation Aravinda Senarath; Secretary to the President Dr Nandika Sanath Kumanayake; Secretary to the Treasury and Ministry of Finance, Planning and Economic Development, Dr.Harshana Suriyapperuma; Senior Additional Secretary to the President Kapila Janaka Bandara; Secretary to the Ministry of Energy and Senior Additional Secretary to the President Russell Aponsu; Secretary to the Ministry of Agriculture, Livestock, Land and Irrigation D.P. Wickramasinghe; and officials of the Ministry of Finance, Planning and Economic Development and the Ministry of Agriculture, Livestock, Land and Irrigation were also present at the discussion.

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Committee Appointed to investigate unrest at Negombo Prison

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A Committee of Inquiry was appointed on Tuesday (07) by Secretary to the President Dr Nandika Sanath Kumanayake, with Cabinet approval, to conduct a comprehensive investigation into the unrest that occurred at Negombo Prison on 5 and 6 July and to report on the circumstances that led to the incident.

The Committee is chaired by retired Supreme Court Judge Priyantha Fernando. Its other members are Additional Solicitor General and President’s Counsel Milinda Gunatilake and President’s Counsel Mohan Weerakoon. Senior Assistant Secretary to the President K.L.D. Asela has been appointed Secretary/Convener of the Committee of Inquiry.

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“Badhu Shakthi 2026” National Tax Week begins

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The inaugural ceremony of “Badhu Shakthi 2026” (“බදු ශක්ති 2026”) National Tax Week, organised by the Revenue Administration Reform and Modernisation Unit of the Presidential Secretariat with the objective of strengthening State revenue generation and accelerating the country’s future development process, was held on Monday (06) morning  at the Presidential Secretariat under the patronage of Speaker Dr Jagath Wickramaratne.

“Badhu Shakthi 2026” is a year-round national programme aimed at transforming the negative public perception of taxation into a positive one while fostering a culture of voluntary tax compliance. To mark its commencement, a National Tax Week will be observed across the island from 6 to 10 July.

A nationwide media and public awareness campaign will be conducted in parallel, including the distribution of leaflets and a range of promotional activities designed to educate the public directly and encourage greater tax compliance.

Addressing the inaugural event, Speaker Dr Jagath Wickramaratne stated that “Badhu Shakthi 2026” is not simply a tax collection campaign but a national initiative aimed at cultivating responsible citizens who love their country.

Further elaborating, the Speaker said:

“Today marks a significant milestone in our country’s future development and economic stability. The strength and sustainability of any sovereign nation depend on its economic independence. Taxation is one of the key instruments for strengthening State revenue and driving national development.

However, taxation has long been viewed negatively by many people. That perception was largely shaped by those responsible for collecting taxes and by successive administrations. When people develop a sense of national responsibility, their attitudes begin to change. For many years, taxes were regarded as a burden. History has shown us that tax evasion occurred on a significant scale, and it must be acknowledged, however reluctantly, that such practices often enjoyed political patronage.

In the past, the public had little understanding of how their tax contributions were utilised. Taxpayers lacked a clear vision of the benefits derived from the taxes they paid. The present Government has succeeded in changing this situation by fostering a more positive public attitude towards taxation. I wish to pay tribute to all taxpayers who contribute towards the Government’s national development agenda.

Today, people have confidence that the taxes they pay are being put to good use. Expressways, highways and power infrastructure projects are now being implemented using domestic funds. There is a sense of pride among the public that construction of the Kandy Expressway has commenced without obtaining loans from any external source. Cabinet approval has also been granted to commence work on the Kurunegala–Galewela Road.

Today, Sri Lanka has grown stronger as a nation capable of financing development activities through domestic resources rather than relying on foreign borrowing.

In ancient times, the country’s great stupas, reservoirs and irrigation networks were built through the collective contribution of the people. Likewise, Sri Lanka can become a prosperous and developed nation only through collective effort. The taxes collected today are being utilised for the welfare of the people. This was clearly demonstrated when the Government allocated Rs. 500 billion in response to Cyclone Ditwah. In addition, substantial benefits are now being provided to the public through the President’s Fund. Educational assistance is being extended to schoolchildren across every corner of the country. All of these initiatives are being financed through domestic resources.

It is essential that the public are made aware of the real benefits derived from tax revenue and of the development projects being implemented. This will strengthen public confidence in the transparent use of tax revenue. The primary objective of this national programme is to broaden the country’s tax base, improve tax compliance, reduce tax evasion and foster a positive attitude towards taxation. If everyone pays their fair share of taxes, the tax burden borne by others can be reduced.

We do not build a beehive with a single bee. It is created through the collective effort of thousands of bees, making it a remarkable achievement. Likewise, ‘Badhu Shakthi 2026’ is not merely a tax collection campaign. It is a national movement to cultivate responsible citizens who love their country. I extend my sincere appreciation to everyone who has dedicated themselves to making this important initiative a success.”

Labour Minister and Deputy Minister of Finance and Planning Anil Jayantha Fernando:

Labour Minister and Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando said that a proper understanding of taxation among citizens would enable Sri Lanka to make greater progress towards economic and social transformation.

He noted that while individuals naturally pursue their own personal goals and aspirations, many of these objectives cannot be achieved in isolation. The success of any society depends on cooperation and collective effort.

He further stated:

“Today, paying taxes has become a much simpler process. As a result, tax collection is now carried out more efficiently and systematically. At the same time, the Government recognises its responsibility to ensure that tax revenue collected fairly is managed prudently and utilised for the benefit of society. If the Government fails to demonstrate sound financial discipline, people will lose confidence and become reluctant to pay taxes. This was evident in the past.

Accordingly, the Government has introduced a tax administration system founded on strong fiscal discipline. We will not tolerate fraud, corruption or waste. If we are to rebuild this country, every citizen must contribute willingly and with a sense of national responsibility. This should not be driven solely by legal obligation. We are confident that the people of Sri Lanka will fulfil this responsibility.”

Deputy Minister of Economic Development Nishantha Jayaweera, Director General of Customs Wimal Liyanagama, Director General of Excise M.B.N.A. Premaratne, and Commissioner General of Inland Revenue Rukdevi Fernando also addressed the gathering.

Among those present were Director General of Public Relations to the President Dharmasiri Gamage, senior officials of the Presidential Secretariat, the Ministry of Finance, Sri Lanka Customs, the Department of Excise, the Inland Revenue Department, as well as taxpayers and other invited participants.

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