The Indian tea exports industry has marked a significant decrease of 14.4% during the first seven months of 2021 compared with the same period in the previous year, marking a steep dip in the export amount from 117.56 million kilograms to 100.78 million kilograms. Major drops were noted in exporting to the Commonwealth of Independent States block and other relevant international markets.
Key Export Statistics
In 2020, the Commonwealth of Independent States block stood as the highest importer of tea from India, with around 30.53 million kilograms. However, this number dropped to 24.14 million kilograms in 2021. Among all the importers, only the USA and UAE registered an increase in importing Indian tea during the discussed period.
Causes for the Decline in Tea Exports
Several reasons underpin the decline in India’s tea exports. A significant factor is the U.S.’s sanctions on Iran, which was previously a substantial buyer of Indian tea. Other reasons include the high costs and reduced availability of shipping containers during the COVID-19 pandemic.
The emergence of low-cost tea varieties in the global market and trade restrictions in traditionally strong importing countries have also contributed to the decline. Meanwhile, the low prices of Kenyan and Sri Lankan teas have outcompeted Indian tea over the past few years.
The Domestic Consumption Factor
A 2018 study by the Tea Board revealed that approximately 80% of Indian tea production is sold domestically. This means that any fluctuations internationally can potentially leave a smaller impact on the overall tea industry.
Political Tensions Impacting Exports
Historically, Pakistan has been one of the major markets for Indian tea exports. However, increasing political tensions over the last three years have resulted in a halt in exports to this region.
Pandemic-Induced Economy
The COVID-19 pandemic’s hit on the economy has led to decreased production in several industries, including tea. This decrease has further contributed to the reduced exports of Indian tea.
About Tea
Tea is derived from the Camellia sinensis plant and is the world’s second most consumed drink, following water. It is believed to have originated in Northeast India, North Myanmar, and Southwest China. It grows best in tropical and subtropical climates, requiring temperatures of 20°-30°C and well-distributed annual rainfall of 150-300 cm.
India’s Role in Global Tea Production
India stands as the largest consumer and the second-largest producer of tea globally, only surpassed by China in terms of production. Additionally, it ranks as the fourth largest tea exporter worldwide. The country also observes International Tea Day every year on 21st May, a date set by the United Nations General Assembly in December 2019. In summary, despite its decline, the Indian tea industry still plays a significant role in both the domestic and international markets.