India’s tea industry is at a critical crossroads, where rising costs and shrinking margins are forcing producers to reassess their sustainability and survival strategies.
India’s tea sector, one of the country’s oldest and most employment-intensive industries, is facing mounting financial pressure. Escalating input costs, stagnant price realisation, labour shortages and climate-related disruptions are tightening margins across tea estates, particularly in North Bengal.
Tea Industry representatives from the Tea Association of India have expressed concern that several estates are being compelled to sell tea below their cost of production. This imbalance between rising expenditure and limited price growth has increased borrowing levels and weakened financial stability across plantations.
A major contributor to the strain is labour cost, which accounts for nearly 60 per cent of total production expenses. Any revision in wages directly impacts operational viability. Alongside this, the prices of key inputs, such as fertilisers, coal, pesticides, and electricity, have risen steadily. Power expenses alone are estimated at ₹10–11 per kilogram of made tea, significantly adding to processing costs.
Labour availability has also emerged as a serious operational challenge. Some gardens report absenteeism rates ranging from 25 to 50 per cent during peak plucking seasons. To maintain output, estates are increasingly relying on outside workers at higher daily wages, further inflating costs.
Climate variability is compounding the problem. Erratic rainfall patterns, rising temperatures and increased pest attacks are affecting both yield and quality. Since premium pricing depends heavily on quality, unpredictable weather conditions are disrupting revenue expectations.
The association has called for structural reforms, including a minimum sustainable price mechanism to ensure producers receive viable returns. Planters are also urging faster disbursal of pending subsidies from Tea Board India and interest subvention on working capital loans to ease liquidity stress.
Additionally, producers are seeking access to agricultural schemes under the Ministry of Agriculture and Farmers Welfare, arguing that tea cultivation is fundamentally an agricultural activity. Lower power tariffs and quicker implementation of solar energy provisions in West Bengal have also been proposed to reduce long-term energy expenses.
Concerns over cheap imports and mislabelling of blended teas as Indian origin have further intensified calls for stricter monitoring to safeguard domestic producers and protect export credibility.
As the world’s second-largest tea producer, India’s tea ecosystem directly employs over one million workers and supports millions more indirectly. Without timely policy intervention and market correction, sustaining this legacy industry may become increasingly difficult.
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Conclusion
India’s tea industry is at a turning point. Rising production costs, labour shortages and climate-related disruptions are tightening margins, but the sector’s importance to livelihoods and exports cannot be overlooked. Millions depend directly and indirectly on tea cultivation, especially in regions like North Bengal, where it forms the backbone of the local economy.
To ensure long-term sustainability, policy alignment is essential. A practical pricing mechanism that reflects production costs, quicker subsidy disbursal through the Tea Board India, access to schemes under the Ministry of Agriculture and Farmers Welfare, and relief on power tariffs can help restore financial stability. Stronger monitoring against cheap imports and mislabelling is equally important to protect domestic producers and export credibility.
With timely reforms and structural support, India’s tea sector long with the tea industry can stabilise operations, improve profitability and continue contributing meaningfully to employment and the rural economy.
