Indian tea exports are expected to decline by 6.9 per cent at 165 million kg in 2003 as compared to last year even as production is likely to record a 5.3 per cent rise at around 870 million kg, according to the Centre for Monitoring Indian Economy.

"Given our forecast of a rise in production and fall in exports, we expect tea prices to remain quite weak in 2003," a CMIE release said in Mumbai on Wednesday.

CMIE said the euphoria over a likely increase in exports to Pakistan appears "unjustified" because that required restoration of bilateral trade relations and then India stiffly competing against Kenya, Indonesia and China.

"Undoubtedly, Pakistan is a key important market as it imports around 110-130 million kg of tea annually and is the third largest importer in the world," it notes.

During 1999 and 2000, India's share in Pakistan's imports was a mere 0.3 per cent and 4.7 per cent respectively.

"Assuming that Indo-Pak trade relations are restored in next month and the country captures around 7-8 per cent of the neighbour's tea market, the favourable impact on India's total exports in 2003 is likely to be only around five million kgs," it said.