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India's tea exports saw a significant 21% decrease in the first three months of 2026, falling to 54.69 million kg from 69.24 million kg a year earlier. This downturn is largely due to escalating geopolitical tensions in West Asia, a key market for India, accounting for about 46% of its tea shipments.
The conflict has led to higher insurance premiums and currency volatility, increasing risks for exporters. Shipping routes are being rerouted around longer and more costly paths, and freight costs have surged due to emergency fuel surcharges. Key markets affected include Iraq, UAE, Iran, Saudi Arabia, Turkey, and Egypt.
Disruptions around the Strait of Hormuz and the Suez Canal, vital for reaching these Gulf markets and for global trade, are forcing longer journeys around the Cape of Good Hope. This increases transit times and expenses for orthodox teas, which had seen recent growth.
Adding to these challenges, North Indian tea production, especially from Assam and West Bengal, dropped by 12.1% in Q1 2026 due to unfavorable weather. While production has since improved, the initial shortfall pushed auction prices up. Average prices rose to ₹183.56 per kg in January-March, but this increase was not enough to cover rising input and operating costs.
India, the world's second-largest tea producer, exported 280.40 million kg in 2025 and aimed for 300 million kg in 2026. However, the current geopolitical situation and production issues threaten this goal.
The industry's heavy reliance on West Asia, which receives about 46% of India's tea exports, creates a significant structural weakness. The Indian Tea Association noted that these disruptions impact not only shipment volumes but also payment cycles and price realization. This crisis comes after a record export year in 2025, with total exports valued at Rs 8,488 crore, boosted by orthodox teas to the Middle East. The Tea Association of India is seeking continued policy support and market diversification to protect the sector from ongoing risks.