Assam’s Tea Gardens Are on the Front Lines of Climate Change – and the Economy Is Paying the Price

ARABINDA RABHA

Assam‘s Tea Gardens Are on the Front Lines of Climate Change – and the Economy Is Paying the Price

The global tea trade recently witnessed a historic milestone, but the celebration on the ground in Assam remains deeply muted. The Indian Tea Association used International Tea Day to celebrate India’s record tea exports while warning that the industry is facing mounting financial and environmental pressures that could threaten its long-term sustainability.

According to the association, India exported a record 280.40 million kg of tea in 2025, valued at about ₹8,488 crore, reinforcing the country’s strong position in the global tea trade. However, this surface-level economic triumph obscures a severe underlying crisis characterized by skyrocketing operational expenses and unprecedented ecological breakdowns.

The Economic Paradox: High Revenues, Evaporating Margins

While the sheer volume and value of exports suggest a booming industry, the reality for organized tea estates tells a different story. The association noted that organised tea estates face especially high fixed operating costs.

The global tea trade recently witnessed a historic milestone, but the celebration on the ground in Assam remains deeply muted. The Indian Tea Association used International Tea Day to celebrate India’s record tea exports while warning that the industry is facing mounting financial and environmental pressures that could threaten its long-term sustainability.

According to the association, India exported a record 280.40 million kg of tea in 2025, valued at about ₹8,488 crore, reinforcing the country’s strong position in the global tea trade. However, this surface-level economic triumph obscures a severe underlying crisis characterized by skyrocketing operational expenses and unprecedented ecological breakdowns.

The Economic Paradox: High Revenues, Evaporating Margins

While the sheer volume and value of exports suggest a booming industry, the reality for organized tea estates tells a different story. The association noted that organised tea estates face especially high fixed operating costs.

However, the ITA said several challenges are intensifying: Rising production costs: Input costs such as fertilisers, fuel, energy and labour have increased sharply, while auction tea prices have grown only modestly over the past decade. When overheads continuously outpace the modest growth in auction prices, the fundamental economic model of the tea estate is compromised.

Compounding these domestic financial pressures are international trade hurdles. Nearly half of India’s tea exports depend on West Asian markets such as Iraq, the UAE, Iran, Saudi Arabia, Turkey and Egypt. Relying heavily on this corridor is currently a massive liability. The ITA warned that geopolitical tensions and shipping disruptions are increasing freight charges, insurance costs and currency risks.

To fully grasp how these intersecting financial pressures impact the tea industry’s bottom line, you can explore the economic variables in the interactive simulator below.

Tea Estate Profitability Simulator

The Climate Reality: A Parched Landscape

The financial squeeze is inextricably linked to a rapidly deteriorating climate. The predictable monsoons that once nourished the Brahmaputra valley are becoming erratic, directly threatening the agricultural foundation of the industry. Severe rainfall deficits earlier in 2026 hit major tea-growing regions including Assam and West Bengal, affecting bush health and early crop growth.

The data from the beginning of this year is particularly alarming. Assam reportedly recorded a 97% rainfall deficiency during January–February 2026. Tea bushes require consistent moisture to generate the flush of premium leaves harvested in the spring. A near-total absence of rain during these crucial early months stunts bush health, lowers the overall crop yield, and drastically diminishes the quality of the tea, directly impacting its auction value.

Use the data explorer below to understand how varying levels of rainfall deficit directly correlate with the degradation of crop health and yield.

Imports and the Threat to Premium Varieties

Beyond climate and export logistics, domestic producers are facing threats from neighboring borders. The association also flagged rising tea imports, particularly from Nepal, saying the trend could hurt domestic producers and premium Indian varieties such as Darjeeling tea. Flooding the market with cheaper, imported alternatives undercuts the already fragile auction prices that Indian estates rely on for survival.

The Human Cost: Indigenous Workers on the Frontline

While industry bodies focus heavily on fixed operating costs, freight charges, and crop yields, there is an inescapable human element to this crisis that cannot be ignored. When organized estates face financial ruin and extreme weather decimates crop yields, the immediate victims are not just the balance sheets, but the people who pick the leaves.

Explore how these financial squeezes and severe rainfall deficits ultimately fall on the shoulders of the tea garden workers—many of whom are indigenous—leaving them with no safety net. These communities are already economically marginalized, living on wages that leave no room for savings. When a 97% rainfall deficit forces estates to cut back on shifts or freeze hiring, these indigenous workers face an immediate existential threat. But the real crisis is happening to the workers, most of them indigenous, with no safety net.

Charting a Path Forward

The survival of Assam’s tea industry requires immediate, systemic intervention. The industry body called for stronger government support, including climate-resilient cultivation measures, balanced regulations, improved export logistics and diversification of export destinations.

Transitioning to drought-resistant tea clones, investing in localized irrigation infrastructure, and seeking stable export markets beyond West Asia are no longer optional strategies—they are prerequisites for survival. If the industry fails to adapt, the record exports of 2025 will be remembered not as a triumph, but as the final peak before a devastating collapse.

Mahabahu Climate Forum

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