The Tea Board of India plans to open more than 20 authentic bars over the next two years to promote exports and 'tea culture' abroad, the board's director for Europe said on Wednesday.

Earlier this year the first Chai Bazaar was opened in central London, the start of a campaign to launch around 25 tea shops in the United Kingdom in the next two years and expand to continental Europe in 2005.

"My counterparts in Moscow are also looking into it and we are also planning to open one bar in Washington...in two to three months' time," Jagmohan Singh Raju told Reuters.

Demand is flat in Britain, the top European tea consumer, and weak in many other European countries and the US, but increasing health and food awareness is working in favour of tea.

"We want to facilitate the opening of very authentic, ethnic-looking but at the same time contemporary tea bars," Raju said.

Expansion depends on the success of the Chai Bazaar in London, but Raju was optimistic, saying that a high-street department store in central London might open a second tea shop at the end of the summer.

The goal is to create origin awareness for Indian tea, which the board reckons could help improve Indian tea exports by 50 per cent by 2007.

Raju said Chai Bazaars are similar to a franchise in which the Indian Tea Board helps with the supply, the business concept and the promotion.

They will also offer some typical Indian snacks and sweets to accompany tea drinking.

The Kolkata-based Tea Board of India, created in 1953 as a department of the Indian ministry of commerce, has offices in New York, Moscow, Dubai and London.

Soft drinks, not coffee the competition

The Board thinks cafe culture is here to stay but that people are looking for alternatives and there is an opportunity to innovate without following in the steps of coffee bars.

"The competition doesn't really come from coffee, it is mainly from soft drinks," Raju said in an interview in his office at the India House in central London.

"The concept of the Chai Bazaar comes from the fact that all the tea you can get here is a blend of 30 different teas inside one bag. You have no choice to drink one specific tea."

"Maybe if we can show the consumer what is out there, we can get them to ask supermarkets for a different type of tea," Raju said.

Producers and consumers should look together for a way out of the downward trend that has pushed world tea prices lower for years, mainly due to oversupply.

India, the world's largest tea producer and fourth exporter, should see production in 2003 in line with 2002, when tea output fell three percent to 826.2 million kg, despite a drought last year and poor pre-monsoon rains this year, Raju said.

Iraq hopes

Raju said Iraq, considered the fastest growing market for Indian tea, was still a major target, but India was looking into diversifying its export destinations.

"There was destruction because of the war in Iraq and this has impacted all the commodities, so it is not a question of tea alone."

"But at the same time we have to keep in mind all sanctions against Iraq have been lifted. So we expect that as things improve politically exports to Iraq will resume."

Raju said the entire Middle East region was an important target for Indian tea exports.

He said he would stick to Indian Darjeeling tea if forced to choose only one as his favourite.