Tea Industry: Already in crisis, can it overcome the new challenges of Tariff and GST?

The Indian tea industry, second only to China's, is a vital part of the country's agricultural economy.

- By Kishore Kumar Biswas

In 2024, India produced 1,285 million kg of tea — an increase of 109 million kg, or 8%, compared to 2023. Between January and July 2025, production reached 641.44 million kg, which is 77 million kg (14%) higher than the same period last year.

Continuing Challenges

The industry faces a host of persistent problems:

1. Climate change — Shifting weather patterns, rising temperatures, and irregular rainfall are affecting both the quantity and quality of tea produced in India.

2. A stagnant domestic market — Unlike Sri Lanka, Kenya, or other major tea exporters, Indian tea is heavily dependent on domestic consumption. However, demand in the home market has remained largely stagnant, raising concerns about an oversupply situation.

3. Competition from imports — Cheap, low-quality tea imports from Nepal (duty-free) and Kenya have been rising steadily. Data from the Ministry of Commerce and Industry confirms this growing inflow, which is undermining Indian producers.