Tea industry’s financial stability under threat amid production drop & falling prices: ITA
The Indian Tea Association warns that the financial sustainability of tea estates is at risk as declining production, falling auction prices, and a surge in imports hit Assam and West Bengal hard.
A file image of tea workers at work. (Photo:X)
Guwahati, July 31: The Indian Tea Association (ITA) has raised a red flag over the financial viability of India’s tea industry, warning that the sector is grappling with serious challenges that could impact its long-term sustainability.
In a statement issued on Wednesday, ITA said the industry stands at a critical juncture in 2025, hit by a combination of production shortfalls, declining price realisation, and increased imports, particularly affecting major tea-producing states like Assam and West Bengal.
The association noted that tea production dropped sharply in 2024, with national output declining by 109 million kilogrammes compared to 2023. Adverse weather conditions, including a 2ºC rise in daily temperatures and reduced rainfall, combined with pest attacks, have severely impacted output in the current year as well. Key regions like Darjeeling have recorded a 10.34% decline in production, while July’s crop is projected to fall by 15% to 20% compared to last year.
These production issues have been compounded by a downward trend in auction prices, particularly for CTC and dust tea. According to ITA, prices have fallen by 7% in Assam and 9.5% in the Dooars/Terai region of West Bengal. “Such price drops, especially in the CTC segment, pose a grave concern for the financial sustainability of many estates,” ITA said.
The situation has further worsened due to a surge in tea imports, which have jumped by 82% in 2024, reaching 44.53 million kilogrammes, with Nepal and Kenya accounting for 74% of the total imports. This influx has exerted additional pressure on domestic prices, eroding margins for Indian growers.
While tea exports between January and April 2025 remained largely stable at 85.77 million kilogrammes, the marginal dip is not enough to offset the overall strain on the sector.
The ITA has urged for urgent policy interventions to protect the financial health of the industry, which is not only a significant contributor to India’s economy but also a key livelihood provider across Assam and West Bengal.