Bangladesh's tax authority has imposed 25 percent duty on imports of tea to safeguard local industry, a senior tax official said.

"The new measure to impose a regulatory duty was taken as increased imports have been affecting local growers," the official said, adding that previously there was no such duty on tea imports.

The country has become a net importer of tea after previously ranking as the world's fifth-largest exporter in 1990s.

Bangladeshi buyers import tea from India, Kenya and Vietnam due to competitive pricing.

Tea exports fell to $3.20 million in the fiscal year ended in June 2011 from $5.65 million the previous year, mainly due to growing domestic demand.

Bangladesh produces 60 million kg of tea a year against demand of 56 million kg. But tea consumption is rising by 4.5 percent annually, in line with steady economic growth and changes in lifestyles.

Industry insiders said around a fourth of Bangladeshi tea is of poor quality and that prices of good tea are higher compared with those of other tea-producing countries.

Tea is sold at the country's sole auction center, in the main port city Chittagong, where most of it is picked up by domestic buyers. (Reuters)