GUWAHATI (India), June 25: India on Monday began distributing $1.2 billion in aid to help tea planters facing a decade-long slump in tea prices caused by stiff competition in the global market.

The package, first announced last May, aims to boost India's production of high-quality tea to increase exports and fend off challenges from new tea-growing countries.

“More than 50 per cent of the total project money would be utilised for replanting and rejuvenating almost all the 800 tea plantations in Assam,” said junior commerce minister Jairam Ramesh in Assam's main city Guwahati.

The minister on Monday handed out 480 million rupees to 82 tea estates in the northeastern state -- the heart of the country's tea industry -- which grew more than half the 955 million kilograms (2.1 billion pounds) India produced in 2006.

The country's $1.5 billion tea industry has been in crisis since 1998, with prices and exports dropping because of a glut in the world market, forcing 70 of Assam's 800-plus tea gardens to close down.

But after replanting aging bushes that are more than 50 years old, India's output of expensive premium Assam tea is expected to jump 40 per cent.—AFP