The Indian tea industry is currently facing a multitude of challenges that threaten its stability and future growth. The Indian Tea Association (ITA) has reported that the industry is at a critical crossroads in 2025, facing significant headwinds such as production shortfalls, declining prices, and a surge in imports.
One of the most pressing issues is the significant drop in tea production. In 2024, tea production fell by 109 million kilograms compared to 2023. This decline is attributed to unfavorable weather conditions and pest infestations in tea gardens, particularly in key growing regions like West Bengal and Assam. The poor production levels are expected to continue into 2025, causing considerable concern for major tea producers. In Darjeeling, production levels are lagging behind 2024 figures by 10.34 percent. Rising average daily temperatures and reduced rainfall have created dry conditions, putting further pressure on tea cultivation in these crucial states. The ITA also anticipates a weak July crop, projecting a decline of 15 to 20 percent compared to the previous year.
In addition to production challenges, the tea industry is also grappling with declining prices. From April to late July, there has been a downward trend in tea auction prices, exacerbating concerns among stakeholders. Specifically, auction prices for CTC (Crush, Tear, Curl) and dust tea have declined by almost seven percent in Assam and 9.5 percent in Dooars/Terai in West Bengal. These price drops, especially for the CTC variety, are raising concerns about the financial sustainability of the industry. Hemant Bangur, Chairman of the ITA, has emphasized that the industry's economic viability is under strain due to rising costs and unremunerative prices, compounded by adverse weather conditions in Assam and Bengal.
The influx of tea imports is further compounding the industry's woes. In 2024, total tea imports surged by 82 percent, reaching 44.53 million kilograms, compared to 24.53 million kilograms in 2023. This significant increase in imports has contributed to the suppression of tea prices in the domestic market.
To address the challenges of ensuring safe tea consumption, the Food Safety and Standards Authority of India (FSSAI) has established maximum residue limits (MRLs) for pesticides used in tea production. The ITA has commended the proactive measures taken by the Assam and West Bengal governments and the Tea Board to foster an ecosystem of compliance, which is crucial for enhancing the brand equity of Indian teas.
Moreover, the ITA has emphasized the need for a statutory scientific quality grading system, ranging from one leaf to five leaf marks on tea retail packets, to enhance market competitiveness and consumer trust. There is also a push for enhanced incentives to support the production of orthodox teas, which are highly sought after in international markets. The Darjeeling tea sector is in need of a financial relief package, endorsed by the Parliamentary Standing Committee on Commerce.
The convergence of these challenges—production shortfalls, declining prices, rising imports, and escalating costs—presents a complex and difficult situation for the Indian tea industry. Strategic and collaborative efforts are needed among major tea-producing countries to restore market balance. Innovation and promotion are essential to appeal to younger consumers and boost domestic consumption. Adapting to changing demographics and focusing on improving plantation productivity are also crucial for addressing workforce challenges.
