Guwahati: The Assam tea industry is facing a “defining moment of transition” amid rising production costs, falling auction prices, climate volatility, and shifting global consumption trends, Indian Tea Association (ITA) Vice Chairman Sunil Sikand said on March 14 in Jorhat .
Speaking at the 135th Annual General Meeting of the Assam Branch Indian Tea Association (ABITA), Sikand warned that the widening gap between declining price realisations and steadily rising costs could threaten the long-term sustainability of the sector.
“The tea industry stands at a defining moment of transition. This is the time to look beyond immediate challenges and collectively shape a cohesive, long-term strategy that secures a sustainable future,” he said.
Production Growth Driven by Small Growers
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India’s total tea production in 2025 reached 1,369.98 million kilograms, registering a 5.1% increase over 2024, Sikand said. However, he noted that the growth was largely driven by small tea growers, whose output rose by nearly 9.7%, while production by organised estates declined slightly by 0.4%.
He also pointed out that production in 2025 was still about 24 million kg lower than 2023 levels, indicating that the industry has not fully recovered.
Export Gains but Logistics Concerns
India exported 280.4 million kg of tea in 2025, with strong shipments from North India and growing demand in markets such as Iraq, the UAE and China.
Sikand said recent trade agreements, including the India–UK, India–EU and India–US deals, could create new export opportunities. However, exporters continue to face major logistical challenges.
He cited high container charges, limited infrastructure at Kolkata Port, and difficulties in utilising the ICD at Amingaon, which increase costs and reduce global competitiveness.
Auction Prices Fall Sharply
The industry is under severe financial pressure due to falling prices, Sikand said.
The All-India average auction price in 2025 declined by ₹14.36 per kg, a 7.1% drop from 2024, while prices in Assam fell by nearly ₹21 per kg (around 9%) compared to the previous year.
“This widening gap between falling prices and rising production costs is not sustainable for a labour-intensive industry like tea,” he warned.
Climate Change, Sustainability and Technology
Sikand said climate change is increasingly disrupting tea production, affecting weather patterns, pest cycles and yields.
At the same time, he stressed that sustainability initiatives such as renewable energy adoption, regenerative farming practices and participation in carbon markets could create new opportunities for the industry.
He also highlighted the growing role of artificial intelligence, satellite monitoring and drone technology in improving pest management, crop monitoring and traceability in the tea value chain.
Changing Consumer Trends
Global consumption trends are also shifting rapidly, particularly among Gen-Z and Gen-Alpha consumers, who increasingly prefer specialty, organic and ethically sourced teas, Sikand said.
“The younger consumer is gravitating toward value-added and single-origin teas that come with authenticity, traceability and a strong story of origin,” he noted.
Wage Hike from April 2026
Sikand said the daily wage of tea garden workers in Assam will increase by ₹30 from April 1, 2026, adding further pressure on production costs.
He urged stakeholders, including trade unions, to work together to improve labour productivity and reduce absenteeism to ensure the sector’s economic viability.
The ITA Vice Chairman thanked the Government of Assam for supporting the sector through schemes such as the Assam Tea Industries Special Incentives Scheme (ATISIS), including interest subvention on working capital loans and subsidies for orthodox tea production.
He also welcomed the government’s decision to increase the orthodox tea subsidy from ₹10 to ₹15 per kg.
Quality and Imports
Sikand also welcomed the Tea Board’s decision to mandate compulsory quality testing for all imported tea consignments from May 1, 2026, calling it an important step to protect domestic producers and maintain quality standards.
Call for Collective Action
Sikand said the Assam tea industry must adapt to new economic realities through technology adoption, stronger sustainability practices and market diversification.
“With constructive engagement with government, technological innovation and collective industry action, Assam tea will continue to strengthen its position in global markets,” he said.
