Tea exporters brace for disruption as West Asia conflict hits shipments

Indian tea exporters face rising uncertainty as the West Asia conflict disrupts payments, shipping and freight costs, threatening flows to key Gulf markets that account for over 40% of total exports

The US–Israel–Iran conflict has cast a shadow over Indian tea exports to West Asia and beyond in the near term, say industry officials.

 

Payments are stuck in Iran for shipped teas, shipments are at sea and stocks in India are lined up for dispatch — there is uncertainty and worry at the moment, said Anshuman Kanoria, chairman of the Indian Tea Exporters Association. “But we can only wait and watch how the situation evolves.”

 

The impact is not confined to West Asia, he added. “The entire western hemisphere is now impacted. Freight rates, which had remained stable, could spike, while shipping and lead times to the US and Europe are expected to lengthen.”

 

Himanshu Shah, chairman, M.K. Shah Exports, said, at the moment, it’s chaotic. “We had certain shipments to West Asia this week, but our buyers have advised us to hold back.”

 

Nearly 70 per cent of M.K. Shah Exports’ production goes to West Asia. The company is one of the largest producers and exporters of orthodox tea.

 

Dipak Shah, chairman of the South India Tea Exporters Association, pointed out that the entire West Asia is fed through Hormuz or the ports in the Gulf that have been attacked by Iran.

 

“While the extent of business losses, cargo stuck at ports and damage in various countries is very difficult to assess at this stage, shipping lines have stopped accepting cargo and are contemplating a high surcharge on account of war. Freight and insurance costs are also likely to go up.”

 

West Asia is the most important market bloc for Indian teas. Data shows that between January and December 2025, the combined export of Indian tea to just the UAE, Iran and Iraq stood at 114.55 million kg (mkg) of India’s total export of 280.40 mkg.

 

C. Murugan, deputy chairperson of the Tea Board, said that about 41 per cent of India’s exports were to Gulf countries. “There will certainly be disruptions. In the short term, this could also impact our exports to other markets such as the US and Europe,” he said.

 

Some consignments have already reached Iran and other Gulf countries, and exporters are now raising concerns over payments, he added.

 

Murugan, however, noted that Iran was predominantly a market for orthodox tea. “Our exports to China are also increasing, and they largely import orthodox varieties. To that extent, China could absorb a part of the volumes meant for Iran. But no single destination can fully compensate for the Gulf markets.”

 

“It is too early to comment on the effects of the current scenario but we are in touch with our exporters and closely monitoring the situation,” Murugan added.

 

During January to December 2025, exports to China jumped to 16.13 mkg from 6.24 mkg in the same period of 2024. That, coupled with strong buying from Iran and Iraq, had pushed Indian tea exports to a record high of 280.40 mkg in 2025.

 

Mohit Agarwal, director of Asian Tea Company, said that but for the conflict in West Asia, orthodox exports in 2026 could have touched 300 million kg.

 

“The current escalation in the region is certainly worrying. Fortunately, this is the off-season in North India. However, there is apprehension about the new season, which begins towards the end of the month,” he said.