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The belt and road initiative and its impact on the global tea trade



Belt and Road Initiative also known as the BRI project is an initiative by China. This was brought to light in 2013 with an estimate of USD 575 billion. As per the world bank, once the BRI project is completed it would reduce travel times along economic corridors by 12%, increase trade between 2.7% and 9.7%, increase income by up to 3.4% and elevate 7.6 million people from poverty.


The tea industry is one of the most traditional industries in global trade. Some of the key suppliers to the global tea industry are Sri Lanka, China, India and Pakistan to name a few. The BRI project can be regarded as one of the key opportunities to turn tea consumption into a global phenomenon. The BRI project is not simply a rejuvenation of the ancient silk road, but a re-enlightenment of the ancient tea road.


Tea traders predominantly have the capability to access increased transport connections globally at a lower trade cost. The tea industry will benefit from many different areas ranging from machine suppliers, material suppliers, tea suppliers, tea importers, tea exporters and many more. To better understand this scenario, let me take you through a simple example on how Tecpacking (a leading tea bag machine and material supplier) would benefit from the BRI initiative. Example: With the BRI initiative, Tecpacking will have easy access to a customer in Netherlands who has a tea packaging and marketing Company. Tecpacking can now directly supply to its customer in Netherlands through the connected route at a much lower transportation cost. This saving can be passed on to the customer in Netherlands who would then be able to package and market his tea products at a much lower rate than he did previously. The same product would then cost much lower than it used to in Netherlands. The benefit of the BRI initiative can be directly experienced by consumers from around the world. In terms of the suppliers, Netherlands would prefer to get its packaging material from a partner involved in the BRI initiative as it will cost him less.


The above is simply a small example from a bigger picture. The benefit from the BRI is much more and complex than the above. It will benefit many different trades and industries globally can experience a revolution and an overall growth. Many of the developing nations rely heavily on the tea industry for its foreign remittances and once the BRI is implemented, it will help elevate these nations as the pricing will be further competitive in the global market thereby helping the balance of payment and foreign exchange earnings.


The BRI will be similar to the European Union which has a set of leading European countries working together to facilitate trade with ease. As we all know, EU has been very successful and has helped trade grow within the community over the years thereby helping the economies of the partner countries. Similarly, the BRI would facilitate trade among most of the Asian economies that are still developing – which will enable an upliftment of their GDP and eliminate poverty to a greater degree. Employment, inflation, economic growth would be some of the key factors that will be positively impacted on among the developing countries because of this.

The initiation of the BRI from China has also driven the biggest economies to design similar projects such as Build Back Better World (B3W) which is an initiative launched by the G7 wealthy democracies. This is another leading project that will support many of the developing countries in the world.


The BRI initiative is a good opportunity for many in the tea trade and its economies. The implementation of this project will be vastly beneficial to many.


Thank you

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