Indian tea exports witness downturn of 2.23% in first seven months of 2023

Recent environment-sensitive innovations by competitors like Kenya and Malawi, along with worries about Indian tea quality and pesticide residue limits, have dampened global demand

The northern regions of India, including Assam and West Bengal, as well as South India recorded a decline in exports (photo: National Herald archives)
The northern regions of India, including Assam and West Bengal, as well as South India recorded a decline in exports (photo: National Herald archives)

Aditya Anand

Tea exports from India have seen a slight decline of 2.23 per cent during the first seven months of 2023, as per data released by the Tea Board of India. This decline, from January to July, brought the total tea exports to 114.60 million kg, compared to 117.21 million kg during the same period in 2022. India exports nearly 17 per cent of the tea that it produces.

The northern tea-growing regions of India, primarily Assam and West Bengal, experienced a decrease in exports totalling 69.56 million kg in the first seven months of 2023, down from 70.56 million kg the previous year. Meanwhile, South India also recorded a decline in exports, dropping from 46.65 million kg in 2022 to 45.04 million kg in 2023. 

The international tea market has not been immune either, with tea exports declining globally. Major tea producers like Kenya, China, and Sri Lanka have also witnessed a drop in exports. Data from the United Planters Association of Southern India (UPASI) indicated that overall tea exports between January and June of this year decreased by 0.8 per cent to 96.3 million kg.

UPASI secretary-general Sanjith Nair said, "Worldwide, tea exports have seen a decline, including shipments from major producers such as Kenya, China, and Sri Lanka." 

In contrast to the export decline, tea production in India during the first seven months of 2023 increased by 0.1 per cent to reach 622.7 million kg, according to provisional data from the association.

Experts suggest that the country should focus more on creating and exporting orthodox tea, which enjoys higher demand globally. Currently, conventional tea constitutes only 9.56 per cent of Indian production but makes up 47 per cent of exports. 

To address the challenges the tea industry faces, experts emphasise that the government should tackle structural issues and extend World Trade Organization (WTO)-compatible incentives. Additionally, increasing support under the remission of duties or taxes on export products scheme is suggested to boost the sector's growth. 

“The recent introduction of environment-sensitive innovations by competitors like Kenya and Malawi, coupled with concerns over the quality of Indian tea and maximum residue limit compliance for pesticides, has influenced the demand for Indian tea among Western retailers,” said former finance secretary Subodh Garg.  

Garg, who recently wrote an article on the Indian tea industry, explained the situation to National Herald by pointing out that Indian tea was a bulk kind of tea. At the same time, other exporters like Kenya had customised their tea based on customer demand.

“India’s competitors in tea exports are into consumable tea. There is a global overproduction of tea, and demand is declining slightly. In such a situation, consumers will prefer sophisticated and prepared tea, rather than bulk tea. Kenyans have new tea varieties like yellow tea, while our traditional tea has not evolved much. Hence, we see a situation where tea that is packaged, presented and tastes better is pushed,” he said.    

In light of these developments, the Tea Board's ambitious 2022 target of increasing sectoral exports from 195.5 tonnes in 2021 to 300 tonnes in 2025 appears challenging.

To add to the specific challenges of our tea industry, the unforeseen trade disruptions caused by Covid-19 pandemic and the Russia-Ukraine conflict have compounded the difficulties faced by Indian tea exporters, making it imperative for the government and industry stakeholders to come together to address these issues. 

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