Industry bodies support proposal for minimum sustainable price for tea

A committee of the Indian Tea Board has recommended implementing a Minimum Sustainable Price for tea, which was welcomed by various industry stakeholders on Tuesday, 10 November, 2026. According to a report by The Hindu, industry bodies believe this initiative will help in increasing the wages of tea garden workers and ensure the long-term sustainability of the industry.

Representatives of various organisations associated with the tea industry have expressed concerns that the implementation of the Code on Wages will further increase wage costs, which could pose additional challenges to the financial viability of tea producers.

C. K. Dhanuka, Chairman of Dhunseri Tea & Industries, stated, "The tea industry is facing rising cost pressures, while the returns received for tea prices have remained relatively stagnant. A minimum sustainable price framework is essential to bridge the widening gap between production costs and market returns and to ensure the long-term sustainability of the industry." He added that this would allow the industry to absorb wage reforms, protect employment, and maintain the competitiveness of Indian tea.

Sunil Singh Sekand, Chairman of the Indian Tea Association (ITA), termed this recommendation a crucial policy intervention to address the structural challenges facing the Indian tea industry. He said that ensuring producers receive fair returns is vital for continuing operations, investing in replanting, increasing productivity, and the sustainability of the industry.

Hemant Bangur, former President of the ITA, stated that the industry has failed to uplift the industry workforce and that something is fundamentally wrong in the industry as the balance sheets of most tea producers are in loss. He added that the market is not efficient and if market forces are allowed to decide the fate of the industry, it will lead to the destruction of tea gardens.

A press release issued by the Indian Tea Association (ITA), Tea Association of India (TAI), United Planters' Association of Southern India (UPASI), Confederation of Indian Small Tea Growers' Associations (CISTA), and Federation of Indian Tea Manufacturers' Association (FITMA) expressed concern over price stagnation in recent years.

According to the press release, the annual Compound Annual Growth Rate (CAGR) in tea prices over the last few years has been approximately 2-3%, while the estimated CAGR in input costs has been 10-14%. This widening gap has affected the ability of producers to continue operations, invest in replanting, improve productivity, and maintain quality standards.

Tea producers have not disclosed the details of the minimum sustainable price but stated that the proposed price band would only include production costs. They further stated that the proposed framework needs to take into account the diverse economic realities, agro-climatic conditions, production methods, and operating costs of India's tea-growing regions.

Stakeholders stated that this proposal to implement a minimum sustainable price has been sent to the Ministry of Commerce, which has not yet taken any decision on the matter.

The daily wage of a tea garden worker in West Bengal is ₹250. Millions of workers are employed in approximately 270 large tea gardens and hundreds of small tea gardens across the state.