Tea Industry in India: Problems and Prospects

Abstract

India is the largest producer and consumer of tea in the world and accounts for around 27 per cent of world production and 13 per cent of world trade. Export of tea is around 20 per cent of domestic production. The bulk (75 to 80 per cent) of tea production comes from Northern India, Assam and West Bengal being the major contributors. In recent years, however, India’s long-standing predominance in the world market as the largest producer and exporter of tea has taken a beating due to sluggish growth in production coupled with slow ascendancy in domestic consumption (Mitra, 1991). India’s share in world exports of tea has also drastically declined indicating that India is unable to take advantage of the expanding world market. To add to the woes of the tea firms and farmers is the falling prices of tea both in the domestic and international markets. These changes would have an adverse impact on the economy. It is pertinent to assess the performance of tea sector and identify ways and means of overcoming the problems. Therefore, the present study was taken up with the following specific objectives; (a) to study the composition, nature and directions of tea trade, and, (b) to assess the competitiveness of tea and to suggest policies to ameliorate the depreciating situation of tea industry.