FROM THE TEA BOARD OF INDIA NO COPYRIGHT INTENDED

The Indian Tea Industry - Revenue, Market share, Highest producing states

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India is known all over the world for its wide variety and luxurious quality of tea. Let us take a deep dive into the tea industry in India and reveal what the tea market in this vibrant country looks like!

Brief Overview 

After China, India is the world's second largest producer of tea and is also the largest consumer of the delicious beverage, using almost 30% of the entire tea production in the world and thus, accounting for nearly a fifth of global consumption in 2016. 

The majority of all tea production comes from the country's north-eastern region, with Assam and West Bengal being the leading producers. The state of  Assam is the single largest tea-growing region in the world. Tamil Nadu was the highest producer of tea among the southern states of the country, most of which is grown in the hills of the Nilgiris district in the southern Western Ghats. Munnar and Wayanad in the south were the other tea-growing districts. 

After China and Kenya, India exported the most tea globally in 2018 and also achieved the highest tea exports in 2017 in almost four and a half decades. However, due to high domestic consumption, the annual growth of the country's exports has been moderate. Nearly 80% of the overall output in India is consumed domestically. The per capita consumption of the beverage in the country has witnessed a significant increase in the last decade.

In depth look into the tea map of India

In 2017, the total area cultivated for tea throughout India was around 2396.694 square miles, up from around 2227.809 square miles in 2016. The north-eastern state of Assam is the country's largest producer of tea. 

In fiscal year 2019, tea production in Assam was approximately 702 million kilograms, the highest of any other area in the world. With close to 395 million kilograms, West Bengal came second that year. That year, a total of 1,35 billion kilograms of tea were produced in the country. Assam is the country's main tea producing state, followed by West Bengal.The Assam and Darjeeling types of tea are the most known types of beverage globally, because they depend on the place of origin and are regionally exclusive. With production concentrated in the Nilgiris, South India accounts for nearly a fifth of the industry. Although the region has a significantly lower performance than North India, its production of premium varieties of superior quality drives the industry in the region. 

Black tea is the largest segment of the tea sector in India when looked at by type. The black variety of the beverage experienced a modest annual growth of 3.3 percent between 2008-2017. Black tea, whose market share in India varies between 35-40% of the total market  is closely followed by green tea whose market share is between 32-36% in the recent years, likely because of its growing demand for its health benefits. 

Due to the perceived superior quality of packed tea, the customer is gradually preferring packaged over unpackaged varieties. Currently, almost 80 percent of urban Indian households and almost 75 percent of rural Indian households choose to purchase their packaged product forms.

Geographically, the North Eastern region accounted for the largest market share of 61.3% in 2017 on the back of major producing regions of tea and it is closely followed by Southern India, based on the second tea producing region, which encompasses major packaging industries.

 

A closer look at the 3 main growing regions

Darjeeling

The tea gardens are located on the hillsides of the Eastern Himalaya, between 600 and 2,000 metres in elevation. The physical geography of the region results in the land experiencing cool air with dry winter months from November to February followed by monsoon weather in the summer months between July and September. The subtropical and wet temperate forest cover that has developed under these conditions have resulted in slightly acidic loamy soils with high organic materials. Because the plantations are on steep slopes, the soil is well-drained and deep enough for long root systems. Being on the sides of the hills and at high elevations where cool dry air interacts with warm moist air, there is persistent fog or cloud cover during the growing months. These are ideal conditions for the Camellia sinensis plant and it is these climatic conditions that drive the different plucking seasons - Spring (1st flush), Summer (2nd flush), Monsoon flush and Autumn flush.


Approximately 11,000 tons of Darjeeling tea from the official Darjeeling area is produced and sold  each year. Eleven thousand tons of tea sounds like a lot, but not exactly. Each year the Assam region of India produces around 680,000 tons of tea. So, relatively speaking, Darjeeling teas are pretty rare, coveted, and at very high prices.

Assam

The state consists of the northern Brahmaputra valley, the middle Karbi and Cachar hills and the southern Barak Valley. The climate in Assam is such that it experiences heavy rainfall between March and September, with very high humidity in the summer months.  Assam's soil has been classified into three types -red loam soil, lateritic soil and alluvial soil. The low altitude, rich loamy soil conditions, ample rainfall and a unique climate helps it to produce some of the finest orthodox leaf teas. It is these unique environmental conditions that give the teas their special quality, reputation and character.

India's largest tea research centre managed by the Tea Research Association is located in Jorhat. This centre, which was started in 1911 at Tocklai (Jorhat), has made significant contributions towards tea. Assam Orthodox tea has recently been registered as a Geographical Indication in India.

Now, Assam Tea has an international reputation and has a large share of the world's tea market. The total tea area cultivated in Assam accounts for more than half of the total tea area of the entire country! The average annual production of tea in Assam is estimated to be about 630-700 million kg.

Nilgiri

Teas in the Nilgiri region are grown at elevations ranging from 1000 to 2500 metres above sea level and this region receives a rainfall 150 to 230cm.

The Nilgiri Hills come under the influence of both south-west and north-east monsoons which is a reason why the tea leaves grown here are plucked around the year. Nilgiri Orthodox tea is a registered Geographical Indication (GI). Both Orthodox and CTC varieties of tea are manufactured in this region. Nilgiri teas are one of the great undiscovered gems of the tea world, and often one of the greatest bargains. 


The total tea growing output in the district fell from 15.88 million kg in 2018 to 13.58 million kg with adverse weather prevailing in several months in 2019. In 2019, the biggest tea growing district in the South was down 14.48 percent.

Facts at a glance

  • Total Indian tea export was US$ 830.90 million in 2019 and US$ 826.47 million in 2020.
  • India currently stands fourth in terms of tea export after Kenya (including neighboring African countries), China and Sri Lanka.
  • As of 2019, India was the second largest tea producer in the world with production of 1,339.70 million kgs.
  • The top 3 tea exporting countries in the world are, China followed by Indian and then Sri Lanka. The United States ranks 11th worldwide in this respect.
  • The per capita consumption of tea in India is 750 grams per person annually which is way lower than UK where the per capita consumption is 1.94kg per person annually while Turkey leads the list with a whopping 3.15kg consumption per person annually. The US us far behind with a per capita consumption of 230 grams per person annually.
  • The country is home to a wide variety of teas, including black tea. CTC tea, orthodox tea, green tea and organic tea. Unlike many other teas producing and exporting nations, India has a manufacturing base for both CTC and orthodox tea in addition to green tea.
  • India offers high-quality specialty teas, such as Darjeeling, Assam Orthodox and the high-range Nilgiris, which have a distinctive aroma, strength, colour and flavour.
  • The state highest tea consumption is Maharashtra whose share is at 14.86% out of the total Indian tea consumption, followed by 10.35% in UP

What the future holds

In 2019, the amount of consumption in the nation reached approximately 1.10 million tons. All things considered, the industry is expected to expand in the forecast period of 2020-2025 at a CAGR of almost 4.2 percent.

 

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