$87 mn at risk: Indian tea sector wary as US slaps 50% tariff on Indian goods

Guwahati, Sept 2: The tea industry has voiced concern over the recent curbs imposed by the US on Indian goods, stating that the developments stand to hit the industry hard. The US, which is the fourth largest destination of Indian tea, recently imposed a 50% tariff on Indian goods.

While the US is the fourth largest importer of Indian tea by volume, it happens to be the second largest importer of Indian tea by value, purchasing USD 87.77 million worth of tea in 2024-25 (Apr-Mar).

Data shows that Indian tea exports to the US had been on an increasing scale before the sudden imposition of a 50% tariff by the US.

India exported 17.54 million kg of tea to the USA in 2024-25 (Apr-Mar) out of its total tea exports, which was 257.88 million kg. The exports to the US, valued at USD 87.77, constitute about 7% of the total exports of Indian tea.

In 2023-24 (Apr-Mar), 13.83 Mkg of tea worth USD 68.67 million was exported to the US against India's total tea export of 250.73 million kg. This constituted about 6% of the total exports of Indian tea.

"The US is the fourth largest destination of Indian tea as far as Indian tea export is concerned. As for the Indian tea industry being adversely affected by the US tariff, it will definitely have a negative impact on the Indian tea industry. However, we are hopeful that both countries will settle their differences soon in the best interests of trade between the two countries," Bidyananda Barkakoty, adviser, North Eastern Tea Association (NETA), told The Assam Tribune.

India exports about 20% of its tea production and the balance 80% is consumed domestically in the Indian market.

In 2024-25, India produced 1,315.77 million kg. While 17.54 million kg of tea export to the USA is just 1.33% of India's total production, the same is 7 per cent of India's total tea exports.

"As our goal is to achieve 300 million kg of exports, every market, including the US market, is very important for the Indian tea industry”, Barkakoty added.

The Indian Tea Association has raised alarm over the sharp decline in tea auction prices at major centres in Kolkata, Guwahati, and Siliguri, citing increased production, excess arrivals, and weak demand as the primary reasons.

From mid-July to mid-August, average prices dropped by Rs 32 to Rs 74, putting severe financial pressure on producers. The association stressed that a Minimum Sustainable Price (MSP) for made tea is now essential to ensure production costs are covered with reasonable margins, while also serving as a safeguard against unfairly cheap imports.

Highlighting the challenges, the association pointed out a 57.14 per cent surge in low-cost tea imports in the first half of 2025, with Kenya as a major contributor, which has further hurt domestic market dynamics.

It urged stricter import regulations, including pre-import conditions and a minimum import price, to protect the industry. Additionally, it expressed concern over the recent 50 per cent tariff imposed by the US on Indian goods, warning that the move could dent Indian tea exports, particularly as the US remains a key market, importing over 17 million kg in 2024 and 6.26 million kg till May this year.