Impact of West Asia Conflict on India's Tea Industry
The ongoing geopolitical tensions in West Asia have severely impacted India’s tea industry, particularly in terms of exports, demand, and consumption patterns.
Export Challenges
- India exported a significant 280.4 million kg of tea in 2025, valued at ₹8,488.43 crore, with major contributions from Assam, other northeastern States, and West Bengal.
- Around 87% of India’s total tea exports are concentrated in 21 countries, primarily in Europe, the Commonwealth of Independent States, and West Asia.
- Countries like Iran, Iraq, the UAE, Saudi Arabia, Turkiye, and Egypt account for 46% of these exports.
- The recent conflict involving the United States, Israel, and Iran led to a declining trend in tea exports between January and March 2026 compared to the same period in 2025.
Economic Impact
- Freight rates have surged due to disruptions in major shipping routes, with shipping lines imposing an emergency fuel surcharge.
- Price realization is lagging behind due to rising input costs, higher insurance premiums, currency volatility, and increased energy and fertilizer costs.
Market Dynamics
Dinesh Bihani, secretary of the Guwahati Tea Auction Buyers’ Association, highlighted the impact on major markets like Iran, the UAE, and Iraq:
- Delays in shipments and higher transaction costs are affecting competitiveness.
- Economic uncertainty and currency volatility have led to cautious buying behavior among importers, resulting in softer demand, especially for bulk and mid-grade tea segments.
- Rising fuel prices are affecting domestic out-of-home tea consumption, pressuring small vendors and the food service sector.
Industry Resilience
Bidyananda Borkakoty, adviser to the North Eastern Tea Association, emphasized the importance of sustainability:
- The theme for International Tea Day—“Sustaining tea, supporting communities”—is especially vital for Assam, reflecting on the livelihood of lakhs of people dependent on tea.
- The industry anticipates a drastic dip in exports from the 2025 high, with shipment delays extending over 40 days.
- The current situation presents short-term challenges, but there is hope for stability and recovery in trade flows and consumption.
