(GS Paper I – Economic Geography: Important Crops and Major Agricultural Products of the World)
Context (Introduction)
India is the world’s second-largest producer of tea and the largest producer of black tea, yet its global brand presence remains weak. Despite its cultural centrality and export potential, Indian tea faces policy, structural, and marketing challenges.
Background: India’s Tea Legacy
- Origin and Spread: India and China are the original homes of tea cultivation. Tea was first commercialised under British colonial rule after Robert Bruce discovered wild tea in Assam in 1823.
- Institutional Framework: The Tea Board of India (est. 1953) regulates the sector, while auction systems like J. Thomas & Co. in Kolkata (since 1861) continue to determine pricing.
- Production Statistics: India produced around 1,285 million kg in 2024, second to China’s 3,700 million kg. However, only 20% is exported, with most consumed domestically.
- Global Image: While Sri Lanka and Kenya have marketed distinctive national brands (“Ceylon Tea” with the Lion logo), Indian tea is mostly exported as unbranded blends, losing identity and value.
- Major Tea Regions: Assam, West Bengal (Darjeeling, Dooars, Terai), Tamil Nadu (Nilgiris), and Kerala form India’s tea heartlands, employing over 1 million workers.
Main Arguments: Why Indian Tea Lacks Global Brand Value?
- Overreliance on Bulk Exports: Nearly 90% of Indian tea is sold in bulk for blending (e.g., “English Breakfast” or “Earl Grey”), erasing India’s distinct regional identity.
- Auction Dependency and Policy Rigidities: The Tea Board mandates that 50% of produce be sold via public auctions, discouraging innovation and direct marketing. In contrast, coffee growers gained flexibility after the Coffee Board’s auction system ended in 1996.
- Weak Branding and Marketing: Few Indian brands (Tata’s Tetley, Makaibari, Cha Bar) operate globally. There’s little coordinated brand promotion unlike Sri Lanka’s state-backed campaigns since the 1980s.
- Structural Problems in Production: Over 50% of production now comes from small growers (<25 acres) who fall outside the Plantation Labour Act. This leads to uneven quality, low wages, and weak compliance with sustainability standards.
- Domestic Consumption Patterns: Tea is viewed as a household necessity rather than a lifestyle product. Coffee, in contrast, became aspirational through cafés and urban branding (Café Coffee Day, Starbucks).
- Labour and Environmental Challenges: Poor working conditions, labour unrest, and climate change–induced yield variations have led to estate closures in Darjeeling, Nilgiris, and Assam.
- Market Competition: Kenya and Vietnam have captured significant export shares due to mechanised production and low costs. Nearly half of tea consumed in the UK is now Kenyan.
Challenges and Constraints
- Institutional Inertia: The Tea Board’s dual role as regulator and marketer creates bureaucratic inefficiency.
- Fragmented Industry: Over 2,000 small growers operate informally, limiting economies of scale.
- Lack of Innovation: Traditional processing and packaging limit value addition.
- Price Volatility: Auction-determined prices fluctuate, making planning difficult for small estates.
- Climate Vulnerability: Erratic rainfall and rising temperatures affect yields in Assam and Darjeeling.
- Decline of Traditional Markets: The collapse of the Soviet Union, once India’s largest buyer, disrupted long-standing trade patterns.
Reforms and Way Forward
- Branding and Geographical Indications (GI): Promote Darjeeling, Assam, and Nilgiri teas under protected GI tags with strict quality standards, similar to Sri Lanka’s Lion logo system.
- Auction Reforms: Allow direct marketing and e-commerce sales for producers; create a transparent digital auction model with quality certification.
- Labour and Sustainability Standards: Integrate small growers into formal systems; link wages and certification (Fairtrade, Rainforest Alliance) to export incentives.
- Marketing and Value Addition: Launch a “Brand India Tea” campaign showcasing tea as both heritage and health drink. Encourage boutique stores, tourism-linked cafés, and wellness branding.
- Diversification and Innovation: Promote tea-based wellness products, flavoured teas, and ready-to-drink (RTD) beverages targeting youth markets globally.
- Institutional Support: Restructure the Tea Board as a Tea Development and Export Promotion Authority, focusing on R&D, marketing, and global partnerships.
- International Collaboration: Collaborate with global tea research institutes to improve varieties resistant to climate stress and pests.
Conclusion
Tea is not merely an agricultural crop in India—it is a cultural and economic symbol. For India’s “chai” to achieve its global potential, the sector must move beyond colonial-era systems toward a brand-led, innovation-driven, and sustainable model. Like coffee, Indian tea needs a new story — one rooted in authenticity, modernity, and pride in its origins.
Mains Question
- What factors have prevented Indian tea from emerging as a global brand despite being the world’s second-largest producer? Suggest reforms to enhance its competitiveness. (15 marks, 250 words)
Source: The Hindu