Guwahati: The Assam tea industry is entering a period of major transition as climate change, evolving global consumer preferences and rising production costs reshape the sector, Indian Tea Association (ITA) Vice Chairman Sunil Sikand said.
Addressing the 135th Annual General Meeting of the Assam Branch of the Indian Tea Association (ABITA) in Jorhat on March 14, Sikand said the industry must adapt to new economic and market realities to remain globally competitive.
“The tea industry stands at a defining moment of transition. This is the time to look beyond immediate challenges and collectively shape a cohesive, long-term strategy that secures a sustainable future,” he said.
The transition comes at a time when the structure of India’s tea sector is rapidly evolving. Production is increasingly shifting toward small tea growers, while organised plantations face mounting pressure from rising labour and input costs, climate-induced weather variability, and declining auction price realisations. At the same time, global demand patterns are changing as younger consumers seek specialty, traceable and ethically produced tea.
Sikand said erratic weather patterns linked to climate change are increasingly affecting yields and pest cycles, while global tea consumption is evolving rapidly as younger consumers prefer specialty, organic and ethically sourced teas with traceable origins.
Production trends shifting
India’s total tea production in 2025 stood at 1,369.98 million kg, registering a 5.1% increase over 2024, Sikand said.
However, the growth was largely driven by small tea growers, whose production rose by 9.7%, while output from organised estates declined slightly by 0.4%.
Despite the increase, he noted that overall production was still about 24 million kg lower than in 2023, indicating that the industry has yet to fully recover.
Export growth but logistics hurdles
India exported 280.4 million kg of tea in 2025, with strong shipments from North India and increasing demand in markets such as Iraq, the UAE and China, Sikand said.
He noted that recent trade agreements, including those with the UK, EU and the United States, could open new opportunities for Indian tea exports.
However, exporters continue to face logistical challenges, including high container charges, infrastructure constraints at Kolkata Port, and difficulties in effectively utilising the Inland Container Depot (ICD) at Amingaon, which increase costs and reduce competitiveness.
Auction prices under pressure
The industry is also facing financial pressure due to falling auction prices.
The all-India average auction price in 2025 declined by 14.36 per kg, representing a 7.1% drop compared to 2024.
In Assam, the decline was sharper, with average auction prices falling by nearly 21 per kg, or around 9%, compared to the previous year.
“This widening gap between falling prices and rising production costs is not sustainable for a labour-intensive industry like tea,” Sikand warned.
Technology and sustainability opportunities
Sikand said climate change is increasingly disrupting tea production by altering rainfall patterns, pest cycles and crop yields.
At the same time, he said sustainability initiatives, including renewable energy adoption, regenerative farming practices and participation in carbon markets, could create new opportunities for the industry.
He also highlighted the growing role of artificial intelligence, satellite monitoring and drone technology in improving pest management, crop monitoring and traceability across the tea value chain.
Wage hike from April
The daily wage of tea garden workers in Assam will increase by 30 from April 1, 2026, Sikand said, adding further pressure on production costs.
He urged stakeholders, including trade unions, to work together to improve labour productivity and reduce absenteeism to ensure the sector’s long-term economic viability.
Policy support and quality safeguards
Sikand thanked the Government of Assam for supporting the sector through schemes such as the Assam Tea Industries Special Incentives Scheme (ATISIS), including interest subvention on working capital loans and subsidies for orthodox tea production.
He also welcomed the government’s decision to increase the orthodox tea subsidy from 10 to 15 per kg.
The ITA Vice Chairman further welcomed the Tea Board’s decision to mandate compulsory quality testing for all imported tea consignments from May 1, 2026, calling it an important step to protect domestic producers and maintain quality standards.
Call for collective action
Sikand said the Assam tea industry must respond to emerging challenges through technology adoption, sustainability initiatives and market diversification.
“With constructive engagement with government, technological innovation and collective industry action, Assam tea will continue to strengthen its position in global markets,” he said.