India's tea industry — the world's second-largest producer and consumer, and its third-largest exporter — is under mounting economic pressure. Assam, West Bengal (covering the Dooars, Terai, and Darjeeling regions), Tamil Nadu, and Kerala together account for roughly 96% of national output, with Assam alone contributing more than half. Yet growers face a structural squeeze: production costs — labor, fertilizer, and energy — have climbed 9-15% over the past decade, while tea prices have risen only about 4%.
Around 80% of India's tea is consumed domestically, with the rest exported to more than 25 countries, led by Russia, Iran, the UAE, the US, the UK, and Germany. Competition from cheaper Nepalese tea has weighed on demand for Darjeeling, the region that holds India's first Geographical Indication tag, awarded in 2004-05.
Adding to the cost pressure is a shift in consumer habits: younger, health-conscious urban drinkers are increasingly turning to coffee, ready-to-drink tea, energy drinks, and herbal infusions, at a time when tea supply already outpaces demand.
Source: NextIAS