Kolkata: Despite challenges like uncertainty over weather conditions, rain fury, pest attacks, stagnant prices for a major part of 2025 and row over imports of inferior variety, the Indian tea sector fared relatively well this year with increased output and higher exports, stakeholders said.
Compared to 2024, when the crop was down by 100 million kgs, this year has been better for the overall industry, Tea Association of India president Sandeep Singhania said.
“Till October, we are ahead by 40-45 million kgs over the last year. The market, in terms of pricing, has been selective. It was encouraging for the best quality tea comprising around 10 per cent of the entire basket, but not good for the relatively lower quality varieties,” Singhania told PTI.
During the January-October period in 2025, the country produced around 1,166 million kgs, while the output in 2024 calendar year was over 1,303 million kgs.
In terms of production, organised producers in North India—primarily Assam and West Bengal—reported a shortfall of around 11-12 million kgs during January-October, while output from small growers increased sharply by 40-45 million kgs, driving overall crop growth, according to ICRA Vice President and Sector Head Sumit Jhunjhunwala.
The higher contribution from small growers exerted downward pressure on CTC tea prices, particularly during July to mid-October, when prices declined by Rs 30-60 per kgs.
However, prices have shown a recovery in recent auctions, with realisations improving by Rs 20-25 per kgs for large growers. Despite this rebound, average prices in 2025 remain lower by around Rs 35 per kgs on a year-on-year basis, Jhunjhunwala told PTI.
“In contrast, orthodox tea prices have remained firm, supported by robust demand and an expected increase of 20–25 million kgs in production,” he said.
Orthodox variety fetches better prices in the global markets.
“Sri Lanka, traditionally a major supplier of orthodox teas, has witnessed a decline in output to around 250 million kgs from nearly 300 million kg earlier, creating an opportunity for Indian producers to gain market share and realise better pricing,” Jhunjhunwala said.
Indian Tea Exporters’ Association chairman Anshuman Kanoria said this year is ending on an optimistic note.
“Despite no promotional support, I think we should close the year with 15-20 million kgs over the last year. This increase in exports is largely due to substantial efforts and risks taken by our merchant exporters to increase demand in Iran, Iraq and other markets. The demand from China, potentially a 30 million kgs market, has also increased,” Kanoria told PTI.
He said exporters are bullish over the next year’s outlook, except the EU market, where a new pesticide legislation is supposed to come in April, which will emerge as a challenge.
“EU and the UK combined is a 40-50 million kgs market. If Indian tea loses market share there in view of the stringent legislation, it would be a dampener for us. We need the government’s promotional support to overcome this potential challenge and increase the offtake of Indian teas in CIS countries, middle-east, and North Africa,” Kanoria said.
Singhania, however, said the alleged “inferior quality” imported tea coming into the domestic market and also being exported as Indian origin thumped down the industry.
Planters and exporters had claimed that “inferior quality” imported tea was being blended with the Indian crop and exported without a multi-origin tag by a few stakeholders, which was not only “undermining prices” but also “posing a threat” to the reputation of the country’s tea in the overseas market. The Tea Board issued show-cause notices to a few players over the issue.
In terms of outlook, Singhania said planters are expected to see pressure from wage bills as the remuneration of labourers is likely to go up in the new year in Assam and West Bengal, where elections are due in 2026.
Echoing Singhania, Jhunjhunwala said the industry may begin 2026 with a higher inventory, which could impact prices in the initial months of the new year, and expected wage revision in view of the election year may put planters’ margin in pressure.
Floods and landslides triggered by heavy rain in October wreaked havoc in 30-odd tea gardens in Darjeeling, with reports of loss of plantation areas, deaths of workers and damage to houses of labourers.
The autumn crop, which is around 15-20 per cent of the annual production in the hills, was affected due to the devastation. Last year, production of the aromatic Darjeeling tea fell below 6 million kgs.
However, 2025 was no exception in terms of the impact of climate change and vagaries of monsoon on the tea sector, said Joydeep Phukan, secretary, Tea Research Association.
“Climate change is increasingly affecting tea through erratic rainfall patterns, rising temperatures, prolonged dry spells and heightened pest and disease pressure leading to crop loss and increased cost of plant protection,” he told PTI.
The research body is addressing these challenges through the development of hardy, high-yielding tea clones and seeds with better tolerance to abiotic stresses, refinement of climate-smart agronomic practices, and other ways.
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