Nilgiris: Amid massive crop loss due to incessant rain in July, around 55,000 small and medium team farmers in Wayanad and in the adjoining Nilgiri district of Tamil Nadu are facing another threat – the steep price drop due to unbridled imports. 

According to the Tea Board of India (TBI) figures, the auction price of tea dust came down to an all-time low in July and August, which was reflected in the green leaf price that dropped to as low as ₹12 per kg in July, compared to around ₹16 per kg early this year. The tea leaf price was more than ₹20 for the majority of last year as tea production nosedived in the North East of the country due to hostile weather conditions.

Is import the real villain?
In normal circumstances, loss of production would restrict the supply, sending prices high as consumers would be chasing too few goods. But even when India’s tea baskets in the south and the northeast saw production dip, the prices did not come down. Industry players attribute this anomaly to the imports of low-quality tea from neighbouring Nepal and Kenya. 

Farmers point out that in 2019, imports stood at 15.85 million kg, but by 2022, they had increased to 29.84 million kg.

Among the imports, tea from Nepal has been cited as the chief culprit. As per the Indo-Nepal Free Trade Agreement (2009), the tea imports from Nepal are tax-free.  

According to TBI data, the total tea imports from January to October in 2024 were 16.47 million kg, of which 13.01 million kg came from Nepal, 1.63 million kg from Kenya, at an average import price of ₹165.

However, industry experts and leading farmers raise a suspicion on the veracity of the TBI import data, as figures for November and December  2023-2024 are missing. These months are lean harvest periods in India, particularly in the North East, which contributes the lion’s share of national production.  

288% jump in Kenya imports
Data from the ‘Directorate General of the Commercial Intelligence and Statistics’ (DGCIS) shows that of the 33.8 million kg of tea imports in 2024, 11.53 million kg came from Kenya. 

But according to the Tea Board of Kenya, India imported 13.7 million kg of Kenyan tea in 2024 – an increase of 288 per cent over the previous year (3.53 million kg in 2023). Experts believe the mismatch (of 2.17 million kg) may be due to the missing TBI import data for November and December. 

However, the data clearly indicates that imports played a significant role in keeping the price down, which was not what the farmers had hoped for, as they were hoping for an upswing to help them recover part of their losses.

This has affected the small and medium farmers. “The small tea growers contribute more than 53 per cent of India’s total green leaf production and their interests must be protected,” said A K Sreejith, National Vice President of the Confederation of Indian Small Tea Growers’ Associations (CISTA). “In a recent meeting with the Commerce Ministry officials in New Delhi, we demanded 100 per cent tax on tea imports from Kenya and Nepal,” he added.

“We had also submitted a memorandum to fix a Minimum Sustainable Price of ₹35 per kg for green leaf to save the industry from complete collapse,” he added. 

Low supply, lower prices
In July 2025, the tea production in South India was 20.36 million kg, a decline of 2.34 million kg compared to July 2024 (22.79 million kg). Industry figures suggest that the production in August was even lower than in July. 

TBI data also shows that the weekly auction prices of tea in the Coonoor auction centre in Nilgiris hovered between ₹88 and ₹92 per kg in July and August. The average auction price of tea produced by the 16 factories belonging to the Tamil Nadu Small Tea Growers Industrial Cooperative Tea Factories Federation ( popularly known as INDCOSERVE), fell to ₹79.62 per kg in July.

“While corporate buyers grab the tea dust produced by the small growers for throwaway prices, outside the auction centre, one cannot buy tea dust for less than ₹200 per kg,” said Shaji Chelivayal, president, Federation of Small Tea Growers’ Association (FESTA). “The industry can be saved only if a Minimum Support Price (MSP) is announced for tea dust,” he added.  

Agrarian families worst affected  
The crash in prices following crop failure has dealt a sharp blow to farmers. For the three months in a row from June, INDCOSERVE factories saw the auction price for green leaf plummet to a low of ₹13 per kg just when incessant rain had caused an acute shortage of green leaves in South Indian plantations. 

It is worth recalling that in 2024, the green leaf prices had crossed ₹20 per kg for many months, bringing cheer for farmers.

According to Rajeev M, Secretary, Kayyunni Small Tea Growers Association (KSTGA), the production cost for tea is more than ₹30/kg, as input costs have multiplied in recent years. “Now, most of the small-scale farmers have reduced the number of farm labourers to cope with the price drop,” he said.

“Even in the late 1990s, the price of green tea leaf was around ₹16-18,” he said. “Many have replaced tea with coffee, and many more are in the queue,” he added.

Tea economy at stake
In 2024, India exported  254.67 million kg of tea, earning ₹7,111.43 crore in revenue.

India’s tea plantations span over 6.19 lakh acres, producing on average 1,300 million kg annually. The ongoing crisis threatens the livelihoods of nearly 2.48 lakh small tea grower families spread across Northeast and South India.

As Union Commerce Minister Piyush Goyal informed the parliament, the country has over 12 lakh plantation workers employed in the organised tea sector, with many more engaged in the unorganised sector and small tea farms.