Tea industry seeks minimum sustainable price amid imports, price fall

Indian Tea Association warns of existential threat to producers in Assam and West Bengal as falling prices, rising imports and US tariffs strain the country's tea industry

A persistent decline in tea prices, influx of imports and export market volatility pose an existential threat to the tea industry in Assam and West Bengal, the Indian Tea Association (ITA) said on Monday.

 

Data provided by the producers’ body showed that North India’s three major tea auction centres—Kolkata, Guwahati and Siliguri—witnessed a decline in CTC prices from mid-July to mid-August (Sale 28 to 33/34), ranging from Rs 32 to Rs 74.

 

The CTC variety accounts for about 76 per cent of India’s tea production. The primary reason behind the drop in auction prices is higher offerings on the back of increased production compared to 2024.

 

This has put downward pressure on prices, resulting in financial strain for producers, said the association.

 

The ITA also pointed out that unsold teas at the Guwahati Tea Auction Centre have risen to 36 per cent this season, compared to 23 per cent last year. In Sale 34, 42 per cent of teas remained unsold, while at the Kolkata Auctions the figure stood at 26 per cent in 2025–26, compared to 18 per cent in 2024–25.

 

Against this backdrop, a surge in low-cost imports has added to the industry’s concerns. Imports stood at 19.61 million kg between January and June 2025, a 57.14 per cent increase from 2024, with Kenya being a major contributor.

 

This influx has further depressed domestic market dynamics, the ITA said. The decline in prices has prompted the association to call for a series of measures, including implementing a Minimum Sustainable Price (MSP) for made tea.

 

This mechanism would cover production costs with reasonable margins and also serve as a minimum import price to prevent unfair competition from cheap imports, it added.

 

Impact of US tariff

 

On the export front, there is uncertainty around the United States market, where Indian tea exports now face a 50 per cent tariff.

 

The ITA noted that the US is a significant market for Indian tea, accounting for a considerable share of total tea exports—17 million kg in 2024. This year, till May 2025, Indian exports to the US stood at 6.26 million kg.

 

The recent imposition of a 50 per cent tariff on Indian goods is likely to affect Indian tea exports to the US, the ITA said. “Any increase in cost cannot be absorbed by the supply chain given that the producers are already operating on very thin margins.”

 

However, the industry also expressed hope that the diverse spread of Indian exports across 21 key countries, which account for 88 per cent of total exports, along with the global appeal of Assam and Darjeeling varieties, would set the stage for expansion into new markets, broadening the country’s tea export footprint.