West Asia crisis hurting Indian tea exporters

GUWAHATI

India’s tea industry captains, feeling the pinch due to the West Asia conflict, on Thursday (May 21, 2026) observed one of the gloomiest International Tea Days since it became a calendar event in 2005.

According to the Indian Tea Association (ITA), the largest tea planters’ body in the country, the West Asia crisis has affected exports to countries around the Gulf of Persia and the Gulf of Oman.

About 87% of India’s total tea exports are concentrated in 21 countries across Europe, the Commonwealth of Independent States, and West Asia. Iran, Iraq, the United Arab Emirates, Saudi Arabia, Turkiye, and Egypt account for 46% of the exports.

The conflict involving the United States, Israel, and Iran began in February. Tea exports registered a declining trend between January and March compared to the corresponding period in 2025, reflecting lower export volumes across both North India and South India.

Assam, other northeastern States, and West Bengal are the largest producers of tea in the industry’s North India region, which largely accounted for the landmark 280.4 million kg of tea exported in 2025, with an export value of ₹8,488.43 crore—the highest in recent years.

The ITA said the freight rates have increased due to disruptions in major shipping routes, and the shipping lines have begun imposing an emergency fuel surcharge on cargo loaded from India to various destinations.

The association also said price realisation continued to lag behind rising input costs, driven by higher insurance premiums, increased currency volatility, and higher energy and fertiliser costs.

Short-term challenge

“The ongoing geopolitical tensions in West Asia are beginning to have a noticeable impact on the global tea industry, particularly affecting exports, demand, and consumption patterns. Delays in shipments and higher transaction costs are impacting competitiveness in major markets such as Iran, the UAE, and Iraq,” Dinesh Bihani, the secretary of the Guwahati Tea Auction Buyers’ Association, told The Hindu.

“The economic uncertainty and currency volatility in the West Asian countries have led to cautious buying behaviour among importers. This has resulted in softer demand, especially in bulk and mid-grade tea segments,” he said.

Mr Bihani said the rising input costs, particularly fuel prices, are affecting out-of-home tea consumption domestically, too. “Small vendors and the foodservice sector are experiencing pressure, while household consumption remains relatively stable but price-sensitive,” he said.

He, however, said the current situation presents short-term challenges for the tea industry, with pressure on export volumes, margins, and demand sentiment.

“The industry remains hopeful that stability will return soon, enabling a recovery in trade flows and consumption,” he said.

Bidyananda Borkakoty, the adviser to the North Eastern Tea Association, said the theme of International Tea Day—“Sustaining tea, supporting communities”—announced by the Food and Agriculture Organisation, is highly relevant to Assam, as the livelihood of lakhs of people depends on the beverage.

He said that the industry was bracing for exports to dip drastically from the 2025 high, with shipments getting delayed by more than 40 days. “With so many lives at stake, it is extremely important that the tea industry remains sustainable and continues to thrive,” he said.