Record Exports Fail To Ease Rising Financial Stress In Tea Sector: Indian Tea Association

New Delhi, May 21 (KNN) Despite India's tea exports reaching a record 280.40 million kg in 2025, the Indian Tea Association (ITA) has sounded a sharp alarm over mounting financial stress across the sector, calling for urgent government intervention on pricing support, climate resilience, and export competitiveness. 

Record Exports, Falling Prices

India is the world's second-largest tea producer and third-largest exporter, contributing approximately 19 per cent of global output. The country produced 1,369.98 million kg of tea in 2025, with exports valued at Rs 8,488.43 crore. 

However, the headline export figures conceal a deteriorating price environment. All-India auction prices fell 7.13 per cent in 2025 to Rs 186.92 per kg, down from Rs 201.28 per kg in 2024, with North India prices declining a sharper 9.87 per cent.

In a statement issued ahead of International Tea Day on Thursday, the ITA noted that over the past decade, auction price realisations have grown at a compounded annual rate of just 3.81 per cent, while input costs — including energy, fertilisers, and other farm inputs — have risen significantly, eroding estate viability, PTI reported.

Climate Shocks Compound the Crisis

Climatic stress is adding to the sector's woes. Assam recorded a 97 per cent rainfall deficit during January–February 2026, severely affecting bush health and early-season output. All-India tea production in the January–March 2026 quarter fell to 98.01 million kg from 110.4 million kg in the same period of 2025 — a decline of 11.22 per cent.

Darjeeling in Structural Decline

The Darjeeling segment presents a particularly acute picture of long-term deterioration. Production in the region has plummeted from 11.58 million kg in 2008 to just 5.3 million kg in 2025, with prices recording a negative compounded annual growth rate of around 2 per cent between 2018 and 2024. 

Adding to this, imports of Nepal tea reached 11.70 million kg in 2025 — more than double Darjeeling's entire annual output — raising serious concerns about import competition undercutting domestic growers.

Industry Demands

The ITA has put forward a set of specific demands to the government, including the introduction of a minimum sustainable price mechanism linked to actual cost of production, an upward revision of Remission of Duties and Taxes on Exported Products (RoDTEP) rates, and restoration of incentives for orthodox tea production. 

For the beleaguered Darjeeling estates, the association has sought a dedicated relief package, including interest subvention on working capital loans.

(KNN Bureau)