24.09.2025

Indian Tea Sector

Context
 India is the world’s second-largest producer of tea and a major player in the global tea trade. While domestic consumption remains strong, challenges of export competitiveness, pricing, and quality continue to influence the sector’s global standing.

Global Production and Export Status

• Largest Producer: China remains the world’s leading producer of tea.
   
• India’s Position: India ranks second in production and is also among the top exporters, recently surpassing Sri Lanka to become the third-largest exporter (after China and Kenya).
   
• Consumption Pattern: Over half of India’s tea production is consumed domestically, which reduces the quantity available for export.
   
• Export Data: India exported nearly 255 million kilograms of tea in recent years.
   
• Kenya’s Role: Kenya leads as the world’s largest exporter of tea, highlighting India’s competition in the global market.
   

Price and Quality Challenges

• Revenue Disparity: India exported a higher volume (255 million kg) but earned only about USD 800 million, whereas Sri Lanka earned around USD 1.4 billion from 245 million kg.
   
• Reason: India emphasizes bulk exports and quantity, while Sri Lanka focuses on premium quality and branding.
   
• Way Forward: For better global competitiveness, India needs to:
   
  • Strengthen branding of specialty teas (Darjeeling, Assam, Nilgiri).
     
  • Improve quality assurance and marketing.
     
  • Focus on value-added exports instead of raw bulk tea.
     

Tea Basics and Major Producing Areas

• Botanical Name: Camellia sinensis.
   
• Origin: Ancient China, where tea culture first evolved.
   
• International Recognition: International Tea Day is celebrated on May 21.
   

Major Tea Producing States in India:

1. Assam: Contributes about 55% of national output, known for strong-flavored teas from the Assam Valley and Cachar Valley.
    
2. West Bengal: Renowned for Darjeeling Tea, India’s first Geographical Indication (GI) product. Varieties include Darjeeling Green Tea and White Tea.
    
3. Southern India: Tea cultivation in Tamil Nadu, Kerala, and Karnataka produces Nilgiri and Anamalai teas.
    

Importance of the Sector

• Provides direct and indirect employment to over a million workers, especially women.
   
• Supports rural economies in Assam, West Bengal, and the Nilgiris.
   
• Enhances India’s soft power through cultural recognition of Darjeeling and Assam teas globally.
   

Conclusion

India’s tea sector is vital to its economy, offering both domestic consumption strength and export potential. However, to increase global market share and revenue, India must shift focus from volume-driven strategies to quality enhancement, premium branding, and international marketing. By doing so, Indian teas can command higher prices and greater prestige in world markets, similar to Sri Lanka’s success with premium teas.