Tea minimum sustainable price: five industry bodies back Tea Board panel

Five associations of India's tea industry publicly backed a proposal for a minimum sustainable price for tea at a press conference in Kolkata on Tuesday, 10 November 2026. The proposal comes from a 10-member committee set up by the Tea Board of India, which has recommended that a benchmark price be fixed using a composite index of wage movements and the Consumer Price Index, with periodic reviews. The committee's report on tea from Assam and West Bengal has been sent to the Union Ministry of Commerce, and the associations asked the ministry to notify the price at the earliest.

Tea is the everyday drink of most Indian homes, from the morning chai to the glass at a roadside stall. Behind it sits a long chain of gardens, small farms and factories. The industry's case is that the prices tea fetches have not kept pace with wages and other costs for years, leaving many gardens with little money to replant old bushes or improve quality.

In farm policy MSP usually means a minimum support price, at which the government buys a crop such as wheat. Industry leaders at the Kolkata briefing stressed that a minimum sustainable price is different: it would be a floor reference for what tea should fetch, not a promise that the government will buy the tea. ITA chairman Suneel Singh Sikand said fair, remunerative returns were needed to keep gardens running and to fund replanting and better productivity. UPASI's secretary general asked that the mechanism reflect regional differences in production costs.

The outcome is not certain. In December 2025 the Union government ruled out a minimum sustainable price for tea or green leaf and pointed instead to a price-sharing formula run through the Tea Board, according to reports at the time. The new committee report reopens that question. Small growers, who sell green leaf rather than finished tea, have separately been asking for an officially fixed green leaf rate of Rs 25 a kg, and some reported selling for Rs 18 to Rs 22 a kg in August 2026, according to reports from Assam.

Kenya tried a floor of $2.34 a kg for tea sold through the Kenya Tea Development Agency in 2021; it left farmers with unsold stocks and was later dropped, according to reports from Kenya.

Peepals calculation: Taking the middle of the industry's own ranges, prices rising 2.5 per cent a year for five years end up about 13 per cent higher (1.025 to the power of 5 is about 1.13), while costs rising 12 per cent a year end up about 76 per cent higher (1.12 to the power of 5 is about 1.76). Earlier official data reported from Assam put the average cost of making a kilogram of tea at Rs 80 in 2010 and Rs 140 in 2024, a rise of 75 per cent (140 divided by 80 is 1.75). Our calculation from the reported figures.

Short-term: Nothing changes yet. The proposal is only a committee recommendation, and the Commerce Ministry has not said whether it will notify it. The sources do not say how a benchmark price would affect the retail price of packet tea.

Long-term: If a benchmark is notified and reviewed in line with wages and inflation, gardens and small growers could gain steadier earnings. If it is set too high, the Kenyan experience shows tea can go unsold.

Who is affected: Tea garden owners and workers in Assam, West Bengal and south India, small growers, bought-leaf factories, tea buyers and blenders.

Questions and Answers