KOLKATA: India’s tea industry is facing mounting financial stress due to rising input costs, stagnant prices, labour shortages and climate-related risks, prompting planters to seek policy support and structural reforms to sustain operations, industry representatives said.
“Many estates were being forced to sell tea below cost, leading to higher borrowings and financial strain. Unless we produce high-quality tea and fetch remunerative prices, sustainability is impossible,” Uttam Chakraborty, Chairman of the North Bengal branch of the Tea Association of India, said.
He noted that wages account for nearly 60 per cent of production cost, making the sector highly sensitive to wage revisions and input inflation. Costs of fertilisers, coal, pesticides and electricity have risen sharply in recent years, with power expenses alone estimated at about Rs 10-11 per kg of made tea.
Shailja Mehta, President of the association, said the industry was grappling with a long-term mismatch between cost escalation and price growth.
"It is important that harmony is reached between the cost of production and price realisation,” she said, calling for a minimum sustainable price mechanism to ensure producers receive viable returns.
She highlighted the sector’s economic importance at a recent North Bengal chapter AGM, stating that the tea ecosystem in the northern part of West Bengal supports around 32 lakh people, or roughly 28 per cent of the region’s population.
Industry officials said labour availability has become a major operational challenge, with some estates reporting absenteeism of 25–50 per cent during peak production periods, forcing them to depend on outside labour at higher cost. Climate variability, including erratic rainfall, rising temperatures and pest infestations, is further affecting yields and quality.
Planters have urged faster release of pending subsidies from the Tea Board India, interest subvention on working capital loans and financial incentives for speciality tea production and machinery upgrades. They also want organised tea producers to be allowed access to schemes of the Ministry of Agriculture and Farmers Welfare, arguing that tea cultivation is primarily agricultural in nature.
The industry association has also sought lower power tariffs and quicker implementation of solar power provisions notified by the West Bengal Electricity Regulatory Commission to reduce energy costs.
Stakeholders said cheap imports and mislabelling of blended teas as Indian origin were hurting domestic producers and called for stricter monitoring to protect quality standards and export credibility.
India is the world’s second-largest tea producer and the sector directly employs more than one million workers.