Guwahati: Two days after Assam Chief Minister Himanta Biswa Sarma cautioned tea garden owners that government incentives worth Rs 150 crore could be withdrawn if they oppose land distribution to workers, the Tea Association of India (TAI) has expressed serious concerns over the feasibility of such a move.
Addressing the 50th biennial general meeting of TAI at the Williamson Magor Hall of BCCI in Kolkata on Saturday, TAI president Sandeep Singhania said that while the intent behind granting land rights to tea garden workers is commendable, the proposal poses significant financial and legal challenges for tea estates in Assam and West Bengal.
“We appreciate the intent of the governments of Assam and West Bengal to provide land patta to tea garden workers. However, for the majority of companies, tea garden land is pledged as collateral to banks. Any transfer of this land would create serious financial and legal complications,” Singhania said.
He pointed out that the existing land laws also complicate the process. “The Land Ceiling Act pertains to land, not structures. Company-built assets, such as labour quarters, would require separate compensation. Management must be adequately compensated under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013,” he added.
Singhania further highlighted that the statutory responsibilities of tea garden management would continue even if land ownership is transferred. “The Plantations Labour Act, 1951—now subsumed under the Occupational Safety, Health and Working Conditions Code—mandates housing and other amenities for workers. State-level land distribution does not absolve management of these obligations. Unless the law is amended, management will remain responsible for housing even after land transfer,” he said.
Appealing to both state governments to take these issues into account, Singhania said TAI has also petitioned the West Bengal government to facilitate projects under the Tea Tourism & Allied Business Policy, 2019. He proposed a long-term lease of 99 years at a fixed rate linked to the current market value, along with annual rent, similar to the provisions extended to the jute industry.
“This will greatly assist tea gardens in enhancing their viability and generating employment, which will be conducive to overall economic growth,” he said.
The comments come in the backdrop of a strong warning from Chief Minister Sarma. On January 1, during a New Year interaction with journalists titled ‘Natun Diner Alap’ (Conversations of a New Day), Sarma said the state government would not hesitate to withdraw incentives if tea estate owners resist the land distribution initiative.
“The response of the tea garden owners has not been very positive. We will withdraw incentives from those who do not cooperate with the government in this regard,” Sarma said.
The Assam government introduced legislation during the winter session of the Assembly in November to distribute land in tea estate labour lines among workers, aiming to give them ownership rights over their housing—an issue that now stands at the centre of a growing debate between the government and the tea industry.
In his speech, TAI president Singhania painted a candid picture of both opportunity and concern of the tea industry in the country and said India’s tea industry may be scaling new production highs, but beneath the impressive numbers lie growing structural stresses that threaten its long-term sustainability.
Singhania said India’s tea production has risen sharply over the past 15 years—up by 35 per cent from 966 million kg in 2010 to 1,304 million kg in 2024. On the global stage, India now contributes about 19 per cent of the world’s total tea output of 7,074 million kg, firmly retaining its position as the world’s second-largest producer after China.
Yet, he cautioned, volume growth has not translated into proportional gains. Nearly 90 per cent of India’s production is CTC tea, underscoring the urgent need to boost orthodox tea output to meet changing global tastes and diversify exports. “We must evolve with the market,” he said, stressing that export competitiveness hinges on value addition and product diversification.
The imbalance is stark in exports. While India produces 19 per cent of global tea, its share in world exports is only about 13 per cent. India exported 256 million kg in 2024—an 11 per cent increase over the previous year—but Singhania said this gap highlights missed opportunities in high-value markets.
At home, warning signs are intensifying. Tea imports have climbed to around 45 million kg, up by 22 million kg from 2023, putting additional pressure on domestic prices. In 2025, the all-India average tea price fell by Rs 12.31 per kg, while North India saw an even sharper decline of nearly 8 per cent.
Rising costs are compounding the challenge. Wages alone account for 60 per cent of production costs, and near double-digit wage growth over the past decade has not been matched by farmgate price increases. “There must be harmony between cost escalation and price realisation,” Singhania said.
He also flagged long-term threats—from climate change making key Assam districts barely suitable for tea by 2050, to unfair competition from duty-free imports and the growing divide between estate producers and small growers.
ALSO READ: Assam: CCTOA opposes ST status for six communities on constitutional grounds
Despite the challenges, Singhania stressed that domestic consumption remains a major untapped opportunity. With per capita tea consumption in India at just 840 grams annually, strategic marketing, digital outreach and quality enhancement could unlock the next phase of sustainable growth for India’s iconic beverage.
