India's Tea Crisis: Rising Costs Threaten Industry

India's tea industry is grappling with significant financial challenges, driven by escalating input costs and a critical shortage of labour. Planters are reporting instances of selling tea below production cost, resulting in mounting debt and financial instability.

The sector's reliance on labour, which constitutes approximately 60% of production expenses, makes it highly susceptible to wage revisions and inflation. Costs for essential inputs like fertilisers, coal, pesticides, and electricity have surged dramatically in recent years.

Climate variability, including erratic rainfall and rising temperatures, further exacerbates the situation by impacting tea yields and quality. Labour absenteeism, sometimes reaching 25-50% during peak periods, forces estates to hire external workers at a higher expense.

Industry stakeholders are urging for policy support, including faster subsidy disbursement, interest subvention on loans, and incentives for speciality tea production. They also advocate for lower power tariffs and quicker solar power implementation to mitigate energy costs.

Protecting domestic producers from cheap imports and mislabeled blended teas is also a key concern. These challenges threaten the sustainability of an industry that directly employs over one million people in India and is a crucial part of the economy, particularly in regions like North Bengal.