West Asia raises toast to Indian teas, offsets export losses to Russia, US

Significant gains were made in China, with exports soaring to 9.64 mkg compared to 3.31 mkg last year

Iran and Iraq emerged as key drivers of India’s tea exports during the first eight months of this calendar year, offsetting a decline in shipments to major markets like Russia.

 

According to the latest data from the Tea Board of India, Iraq was the top buyer of Indian tea, at 35.94 million kg (mkg) between January and August this year, up from 30.99 mkg in the same period last year. 

Export to Iran rose to 6.39 mkg, against 6.30 mkg last year. However, exporters point out that teas bound for Iran were mostly routed through Dubai, one of the largest trading hubs. 

 

Numbers show that exports to the United Arb Emirates (UAE) during January-August 2025 soared to 31.23 mkg, against 28.22 mkg in the same period last year. 

Anshuman Kanoria, chairman of the Indian Tea Exporters Association, said Iran and Iraq were single-handedly driving overall exports. “Whatever we are losing in other markets is being offset by these countries… the demand is huge.” 

Hits and misses Tea exports to Russia — traditionally a key market for Indian teas — dropped to 20.84 mkg in the first eight months of this year from 26.92 mkg in the year-ago period.

 

Anish Bhansali, director at export house Bhansali and Company, said exports to Russia fell sharply due to the ongoing Ukraine war and the influx of Kenyan CTC teas into the Russian market. 

“But demand for orthodox varieties remains strong in West Asian markets like Iran and Iraq. Volumes to Iraq are rising, and while there are some payment registration issues in Iran, overall demand remains on a good wicket,” he added. 

Mohit Agarwal, director of Asian Tea Company, said there had been a drop in volumes to the European Union and United States (US). “But Iraq and Iran recorded strong gains. A peace deal in the Israel-Gaza conflict would also indirectly boost Indian tea exports, as it would lift overall sentiment in West Asia.” 

The 50 per cent tariff imposed by the US is also weighing on shipment. “With such a duty structure, it’s difficult for anyone to sustain exports. Once buyers shift away, it takes a long time to regain business,” said Dipak Shah, chairman of the South India Tea Exporters Association. 

Data shows that tea exports to the US during January-August 2025 stood at 10.57 mkg, against 11.37 mkg the previous year.

Orthodox teas leading the charge The driving factor this year has been orthodox tea, which is seeing strong exports, said Sumit Jhunjhunwala, vice-president at Icra. 

“From January to June, India exported a total of 125 mkg, similar to the same period last year. However, the mix has shifted — CTC fell from 56 mkg to 53 mkg, while orthodox rose from 50 mkg to 57 mkg. This change in mix is reflected in the pricing across different segments,” he added.  

 

Data from Calcutta Tea Traders Association (CTTA) showed that the average price of orthodox leaf this season at Kolkata auctions was ₹299.49 per kg, compared with ₹312.49 per kg last year. 

J Kalyana Sundaram, secretary of CTTA, said the quantity of orthodox teas sold at the auctions this year was about 10 mkg higher than last year. “There is more demand for orthodox, so the sales are higher,” he said. 

Himanshu Shah, chairman, M K Shah Exporters, one of the largest producers and exporters of orthodox tea in India, said: “Orthodox market is witnessing good demand so far and is likely to remain at this level for the next few weeks.” 

However, Dipak Shah noted that even though Iraq had emerged as a promising market, most orders were government contracts for medium teas. “The challenge is that losing a single contract can mean a significant drop in volumes.” 

Overall, India’s tea exports during January-August 2025 stood at 174.42 mkg, up from 170.63 mkg last year. Significant gains were also made in China, with exports rising to 9.64 mkg from 3.31 mkg a year ago. 

According to Kanoria, China now holds the greatest market potential.