The Indian tea industry voiced serious concerns over the United States’ imposition of a 50% tariff on Indian goods, effective August 27, 2025, which is expected to severely impact tea exports to one of its key markets. The Indian Tea Association (ITA), a leading industry body, highlighted that the US imported 17 million kilograms of Indian tea in 2024, with 6.26 million kilograms shipped by May 2025. This tariff, comprising a 25% reciprocal duty and an additional 25% levy linked to India’s Russian oil purchases, threatens to erode India’s competitiveness in the US, a critical market for its renowned Assam, Darjeeling, and Nilgiri teas.

The ITA warned that the tariff hike exacerbates existing challenges, including declining tea prices, volatile export markets, and competition from low-quality imports. “The 50% tariff is a limiting factor for our exports to the US,” an ITA spokesperson stated, noting that the industry is already grappling with an influx of substandard tea and unfavorable trade dynamics. In 2024, India exported 254.7 million kilograms of tea globally, valued at ₹71.11 billion, with black tea comprising 96% of exports, but the US tariff could reduce volumes by 9-10% in 2026, according to industry estimates.

To counter these challenges, the ITA has urged the government to implement a minimum sustainable price (MSP) for tea to ensure industry viability and protect millions of workers in Assam and West Bengal. The association also called for incentives to boost orthodox tea production, which is in high global demand, and a level playing field against competitors like Sri Lanka and Indonesia, where governments provide substantial export subsidies. Additionally, the ITA demanded stricter controls on low-quality tea imports and a revision of trade agreements, such as the Indo-Nepal treaty, to safeguard domestic producers.

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The tariff escalation, part of broader US-India trade tensions, could shift US buyers to competitors like Kenya or Sri Lanka, threatening jobs and India’s position as the world’s third-largest tea exporter. With the US accounting for a significant share of India’s $776 million tea export market in FY24, the industry is pressing for urgent government intervention to explore alternative markets and enhance export support schemes like RoDTEP to maintain global competitiveness.

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