Global Tea Production and India’s Role

Few crops in the world carry as much economic weight as tea. After water, it is the most consumed beverage on earth, a daily ritual for roughly half the global population. From misty Assam valleys to the high-altitude estates of Darjeeling, India sits at the very heart of this story – producing, consuming, and exporting tea at a scale that shapes both national income and rural livelihoods. Understanding where India stands in global tea production, which regions drive output, and how tea exports contribute to the economy is essential for anyone studying plantation agriculture.

Tea as a global commodity 🔗

According to the FAO, tea is cultivated in more than 60 countries, primarily across Asia, Africa, South America, and parts of Eastern Europe. Global output has grown steadily – total production reached 6.604 million metric tonnes in 2023, a 26% rise over the previous decade. By 2024, preliminary data from the International Tea Committee put the global harvest at approximately 7.05 million metric tonnes.

Despite this impressive volume, the international trade in tea is relatively contained. Only about 26% of global tea production is exported, while the rest is consumed in the producing countries themselves. This is a defining feature of the tea trade – unlike coffee, where the majority of output is exported, tea is primarily a domestic crop that also serves export markets.

Global tea production has surpassed USD 17 billion annually, with tea trade valued at USD 9.5 billion – a significant source of foreign exchange earnings for developing and emerging economies. The sector supports over 13 million people globally, more than two-thirds of whom are smallholder farmers in developing countries.

Major tea-producing countries 🔗

A handful of countries dominate global tea output. China led global production in 2023, accounting for 50.6% of total output at 3.3 million metric tonnes. India ranked second at 20.7% of global production. Kenya, Sri Lanka, and Vietnam round out the top five.

Importantly, China, India, and Kenya together account for roughly 80% of global tea production. China’s dominance is particularly strong in green tea – it produced over 90% of the world’s green tea in 2024. India and Kenya, by contrast, are the world’s leading producers of black tea, the variety most familiar to consumers in Western markets, South Asia, and the Middle East.

India’s position in the global tea landscape 🔗

India is the world’s second-largest tea producer. India’s total tea output stood at approximately 13.82 lakh tonnes (1,382 million kg) in 2024, with production expected to rise modestly to around 13.90 lakh tonnes in 2025. Critically, India is also the world’s largest consumer of black tea, with around four-fifths of domestic production consumed within the country. This high domestic absorption is one of the key reasons India’s export volumes, while significant, remain lower relative to total output compared to countries like Kenya.

Key tea-producing regions in India 🔗

Tea cultivation in India is geographically concentrated. The northern region – particularly Assam and West Bengal – contributes about 83% of India’s annual tea production, while the southern states of Tamil Nadu, Kerala, and Karnataka account for the remaining 17%.

Assam 🔗

Assam is not only the largest tea-producing state in India but also home to the world’s largest contiguous tea-growing area. Tea is cultivated over more than 307,000 hectares, and Assam produced 650 million kg of tea in 2024 – making it the undisputed production leader. Assam tea is known for its bold, malty flavour and strong liquor, largely because the region’s low-altitude, alluvial plains and high humidity create ideal conditions for the Camellia sinensis var. assamica plant. The two primary growing areas within the state are the Assam Valley and Cachar. Famous estates like Halmari (Dibrugarh) and Monabarie (Biswanath) are globally recognised for premium Assam black tea.

West Bengal 🔗

West Bengal ranks second in tea production, contributing more than 25% of India’s total output. The state has three key growing zones: Darjeeling, Dooars, and Terai. Darjeeling has 87 tea gardens covering around 17,500 hectares and employs over 50,000 workers. Darjeeling tea holds a prestigious Geographical Indication (GI) tag – it is often called the “champagne of teas” for its muscatel aroma and delicate flavour, qualities shaped by high altitude, cool temperatures, and unique soil. Total production from the Terai and Dooars regions alone reached 359 million kg from 97,000 hectares.

Tamil Nadu 🔗

The Nilgiri Hills of Tamil Nadu are the defining landscape of tea in South India. Tamil Nadu produced 164 million kg of tea in 2024, making it the largest southern tea-producing state. Nilgiri tea, grown at altitudes of 1,000 to 2,500 metres, is characterised by its bright liquor, brisk flavour, and natural fragrance. It is widely used in international blends, including many popular breakfast teas sold in Europe and the United States. South Indian states collectively hold a 39% share of India’s tea exports in 2024 – a disproportionately large share relative to their production volume, reflecting the export-oriented nature of southern tea cultivation.

Kerala 🔗

Kerala produced 58 million kg of tea in 2024, primarily from the high-altitude estates of Munnar and Wayanad. Munnar’s tea estates, situated in the mist-covered Western Ghats, produce flavorful high-altitude varieties prized for their quality. While Kerala’s share of national production is smaller than Assam or West Bengal, the state has leveraged its scenic tea estates as a major agritourism draw, adding an additional economic dimension to the crop beyond conventional plantation output.

India’s tea exports and foreign exchange contribution 🔗

Tea has been a consistent source of foreign exchange for India for well over a century. In 2024, India exported 254.67 million kg of tea, earning ₹7,111.43 crore in foreign exchange – the strongest export performance since 2018. This placed India third in global tea exports for 2024, behind Kenya and China, after having surpassed Sri Lanka.

India is among the top 5 tea exporters in the world, accounting for about 10% of total global exports. The dominant export variety is black tea – black tea makes up approximately 96% of all tea exported from India. Indian Assam, Darjeeling, and Nilgiri teas are considered among the finest in the world and command premium pricing in international markets.

Major export destinations 🔗

Indian tea reaches a diverse set of markets worldwide. The leading buyers in recent years have included Russia, Iran, the UAE, China, and the USA. Key importing regions include the CIS countries, UAE, Russia, Iran, and the United Kingdom. In FY 2024-25, tea exports continued to grow, with total shipments rising to 257.88 million kg – a 2.85% increase over the previous fiscal year.

The Tea Board of India, established under the Tea Act of 1953 and functioning under the Ministry of Commerce and Industry, plays a central regulatory and promotional role – overseeing quality certification, export incentives, research, and welfare schemes for plantation workers.

Economic significance and employment 🔗

Tea is not just a crop – it is a livelihood system. The tea industry employs over a million workers directly, particularly in Assam, West Bengal, and Tamil Nadu. Many of these workers are employed on organised tea estates as permanent or seasonal labourers, making tea one of the largest organised employers in rural India. The sector also supports millions more through ancillary activities – transport, packaging, auction systems, and small-grower networks.

Small tea growers (STGs) – farmers who cultivate tea on less than 10.12 hectares – now account for a significant and growing share of national production. Their inclusion in the formal value chain through voluntary sustainability standards (VSS) and government support schemes has become a priority for improving income equity within the sector.

Challenges facing the Indian tea industry 🔗

Despite its strengths, the Indian tea industry faces a set of persistent challenges. Climate change is among the most pressing – erratic rainfall, extended dry spells, and temperature fluctuations directly affect both yield and leaf quality. In Assam and West Bengal, aging tea bushes – some over 100 years old – continue to hinder productivity, requiring systematic replanting programmes. Labour costs in organised plantation sectors have risen significantly, putting pressure on margins, especially for estates producing standard CTC teas that face competition from lower-cost producers in Kenya and Vietnam. Fluctuating international prices, driven by the persistent oversupply of mainstream black teas globally, continue to erode revenue for mid-range producers. The IISD’s 2024 Global Market Report on Tea notes that in some producing countries, smallholder farmers make no profit at all as production costs exceed earnings.

The road ahead: premiumisation and sustainability 🔗

India’s tea sector is responding to these challenges through a strategic shift toward premium and specialty teas. The government’s push for orthodox tea – a high-value, traditional variety targeted at export markets – along with competitive incentives backed by the Tea Association of India, is credited with driving India’s recent export gains. Orthodox teas, which undergo whole-leaf processing rather than the CTC (crush-tear-curl) method, fetch significantly higher prices in markets like Japan, Europe, and the Gulf. The target set by industry bodies is ambitious: reaching 300 million kg of exports by 2030.

Sustainability is equally important. With over a quarter of global tea now produced under voluntary sustainability standards (VSS), there is growing pressure on Indian estates and small growers to adopt certified practices – improving climate resilience, soil health, and worker welfare. Organic certification, geographic indication tags, and transparent supply chains are increasingly becoming requirements, not options, for accessing premium markets in Europe and North America.

What do you think? Given that India consumes roughly 80% of its tea domestically and exports the rest, should there be a stronger national policy push to increase the export share – or does domestic consumption itself represent the more stable and valuable market? And with climate change already impacting yields in Assam and West Bengal, what strategies do you think are most critical for securing the long-term future of India’s tea industry?

References

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