Tea Industry Associations Welcome the Recommendation made by Tea Board of India Committee on Minimum Sustainable Price for Indian Tea Industry

 

11 November 2026: A 10-member committee constituted by the Tea Board of India has recommended the introduction of a Minimum Sustainable Price (MSP) for tea, marking an important step towards addressing the widening gap between production costs and market realisations in the Indian tea industry. Welcoming the recommendation, the Indian Tea Association (ITA), Tea Association of India (TAI), United Planters' Association of Southern India (UPASI), Confederation of Indian Small Tea Growers Associations (CISTA) and Federation of Indian Tea Manufacturers Association (FITMA) have emphasised the need for a sustainable pricing framework to secure remunerative returns for tea producers, protect the interests of small tea growers and ensure the long-term viability of the sector.

India, the world's second-largest tea producer, produces approximately 1,350–1,400 million kg of tea annually, with small tea growers contributing nearly 55% of the country's total production. However, the industry continues to face mounting financial pressures, with production costs increasing significantly faster than tea price realisations. Over the years, tea prices have registered a marginal compound annual growth rate (CAGR) of approximately 2–3%, as compared to an estimated CAGR of 10–14% in input costs. This growing disparity has affected producers' ability to sustain operations, invest in replantation, improve productivity and maintain quality standards.

The press conference brought together senior representatives of the five industry associations, representing diverse segments of the tea value chain, including organised tea estates, small tea growers and bought-leaf factories. The discussions highlighted the need for a pricing framework that recognises the varying economic realities of the sector while ensuring the sustainability of tea production across regions.

 Mr. C.K. Dhanuka, Chairman, Dhunseri Tea and Industries, said, “The tea industry is confronted with mounting cost pressures, while tea price realisations have remained relatively stagnant. With further increases in wage costs anticipated pursuant to the implementation of the Code on Wages, the financial viability of tea producers is likely to face additional challenges. A Minimum Sustainable Price framework is therefore essential to bridge the widening gap between production costs and market realisations and to ensure the long-term sustainability of the industry. A Minimum Sustainable Price will help bring realisations in line with costs, so that the industry can protect accommodate wage revisions, protect employment and the competitiveness of Indian tea.”