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India’s tea industry seeks Govt support as costs, labour shortages bite
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Tuesday, 24 February, 2026, 14 : 00 PM [IST]
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Our Bureau, New Delhi
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India’s tea sector — the world’s second-largest producer and a major employer of over one million workers — is facing intensifying financial pressure due to soaring input costs, labour shortages, stagnant tea prices and climate-linked risks, prompting industry leaders to call for urgent policy support and structural reforms.
Representatives of the Tea Association of India (TAI) said many tea estates are being forced to sell tea below production cost, eroding profit margins and increasing borrowing as planters struggle to sustain operations. Labour costs — which constitute nearly 60 % of total production expenses — have risen sharply, driven by higher wages and shortages of experienced workers. In some estates, absenteeism rates of 25–50 % during peak periods have compelled management to hire costly outside labour.
In addition to labour challenges, rising input costs for fertilisers, pesticides, coal and electricity have added to financial strain, with power expenses alone estimated at ?10–11 per kg of processed tea. Climate variability such as erratic rainfall and pest infestations is also affecting yields and quality, further squeezing margins.
TAI leaders are urging the government to introduce a minimum sustainable price mechanism that ensures producers receive remunerative returns aligned with cost increases, along with access to agricultural schemes normally available to other farming sectors. They argue this “harmonisation” between production cost and price realisation is critical for long-term viability.
Planters are also seeking faster release of pending Tea Board subsidies, interest subvention on working-capital loans, and incentives for speciality tea production and machinery upgrades. Proposals include extending eligibility for Ministry of Agriculture schemes to tea estates, reducing power tariffs and expediting solar energy provisions to cut energy costs.
Stakeholders have also raised concerns over cheap imports and mislabelling of blended teas as Indian products, arguing that these practices hurt domestic producers and undermine quality standards and export credibility.
With a large rural population dependent on the tea economy, industry leaders say strategic policy intervention is essential to protect livelihoods and safeguard the future of India’s century-old tea sector.
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