Tea industry seeks policy support as rising costs, labour shortage strain margins
“Many estates were forced to sell tea below cost, leading to higher debts and financial distress. Sustainability is impossible unless they produce high quality tea and fetch good prices,” said Uttam Chakraborty, President of the North Bengal Chapter of the Tea Association of India. he said.
He noted that wages constitute approximately 60 percent of the cost of production, making the sector highly sensitive to wage revisions and input inflation. The costs of fertilizer, coal, pesticides and electricity have risen sharply in recent years; The energy expenditure alone is estimated to be around 10-11 Rupees per kg of tea made.
Shailja Mehta, president of the association, said the industry is grappling with a long-term mismatch between cost increase and price increase.
“It is important to ensure harmony between the cost of production and price realizations,” he said, calling for a minimum sustainable price mechanism to ensure producers receive reasonable returns. he said.
He highlighted the economic importance of the sector at the last General Assembly Meeting in North Bengal, noting that the tea ecosystem in the northern part of West Bengal supports around 32 lakh people, roughly 28 per cent of the district’s population.
Industry officials said labor availability has become a major operational challenge, with some facilities reporting 25-50 percent absenteeism during peak production periods, forcing them to rely on outside labor at higher costs. Climate variability, including erratic rainfall, rising temperatures and pest infestations, further impacts yield and quality. The growers have called for faster release of pending subsidies from the Tea Board of India, interest subsidy on working capital loans and financial incentives for specialty tea production and machinery upgrades. They also want organized tea growers to be allowed access to programs of the Ministry of Agriculture and Farmers Welfare, arguing that tea cultivation is agricultural in nature.
The industry association also called for lower power tariffs and faster implementation of solar provisions notified by the West Bengal Electricity Regulatory Commission to reduce energy costs.
Stakeholders said cheap imports and mislabeling of blended teas as of Indian origin were hurting domestic producers and called for tighter monitoring to maintain quality standards and export credibility.
India is the world’s second largest producer of tea and more than one million workers are directly employed in the industry.
