The state of Assam in India’s northeast is where the nation’s tea industry began. India’s first tea estate and first tea research station were established there during British colonial days and continue to operate today.
As in the tea sector elsewhere in India, producers in Assam confront a long list of challenges: stagnant prices, rising costs, flat exports, labor shortages, increasingly harsh weather, and competition in the domestic market from an influx of low-cost Nepal tea.
But Assam’s industry has some advantages over other domestic origins. One is its long history, with an ample legacy of talent, workers, smallholders, estates, institutions, and other resources. Related to this is scale: Assam grows about 50% of India’s tea. The local industry employs 1.15 million people, accounts for 90% of the state’s exports, and drives the economy. State government duly lends a hand with special programs and measures. The latest industry support package was announced in March.
This year’s celebration of 200 years of the Assam tea industry looks back to 1823, when the British East India Company learned about the Camellia sinensis var assamica variety of the tea plant, which had long been harvested in the wild in parts of Assam. Over the next 100 years, the company turned Assam into the most important plantation area for tea in India.
In the 20th century, it was in Assam that Scottish inventors began to introduce mechanization to scale up production. Among the equipment was machinery that enabled the production of CTC (crush, tear, curl) tea, which changed the landscape of tea and the sheer scale of production in Assam. Most black tea blends, notably English breakfast, include Assam tea.
Assam tea stands out for its flavors. The Assamica varietal produces larger leaves than the chinary tea plants. The liquor, a rich coppery red, is full bodied, malty, often sweet, and with a welcome astringency to the cup. A well-rolled orthodox Assam tea with a sprinkling of golden tips is especially flavorful. Well-made CTC is worth drinking straight up. It has some astringency, but tea producers in Assam prefer it plain, as rangsa or red tea. Delicious! Assam Orthodox won its Geographical Indication tag in 2007.
Production, markets, prices
Assam State has some 347,000 hectares under tea, according to India Tea Board data. CTC remains the mainstay of Assam’s industry, most of it consumed within India. In 2022, production for the first 11 months was reported at 657 million kilograms, up about 10 million kg from 2021.
During the past two years, the loss of production in Sri Lanka, the other strong producer of orthodox black tea, brought extra business to Assam. But exports of 227 million kg in 2022 remained below the recent peak of 256 million kg in 2018, according to figures from the North Eastern Tea Association (NETA). And these amounts fall short of the industry’s goal to export 300 million kg annually. This will require keeping a steady focus on the big picture, stakeholders say.
“India should concentrate on traditional markets and explore new markets with a long-term strategy,” says Bidyananda Barkakoty, head of NETA. “Assam tea’s strong market is our own domestic market, and of course, effort should be there in the export market too, so as to reach the 300 million kg annual target.”
In 2022, auctions saw about 365 million kg from Assam, with a sale volume of 72%. Of this, only 52 million kg were orthodox teas. Assam Orthodox fetched an average of Rs 284 per kg at auctions. That compares to Rs 205 per kg for CTC from Assam.
State support
The Assam State budget announced in March allocated Rs 5.5 billion ($66 million) for the tea industry in the 2023 fiscal year beginning on April 1. Among the provisions are:
1. An increase in an existing subsidy for production of orthodox and specialty tea under a program known as ATSIS, rising to Rs 12 per kg, up substantially from Rs 7–10 per kg before.
2. Exemption of agricultural income tax for the next three years.
3. Waiver of electricity dues for families of tea workers living in tea estates, with Rs 1.5 billion earmarked to cover this.
4. Increase in compensation under the Wage Compensation Scheme for Pregnant Women of Tea Garden Areas of Assam, rising to Rs 15,000, up from Rs 12,000.
5. Construction of 10,000 houses in tea garden workers’ colonies, under a national program for affordable urban housing, Mukhya Mantri Awaas Yojana.
6. Construction of 500 community halls/skill centers in tea gardens.
7. Official recognition of the tea gardens and Adivasi community as a separate sub-category within the national government’s Other Backward Classes designation, under which social welfare promotion is guaranteed by the Constitution.
8. Roadshows throughout India to promote Brand Assam Tea to celebrate the bicentennial year.
A further Rs 1 billion has been earmarked to support the Assam Tea Corporation Limited (ATCL), a state-owned enterprise, to pay their outstanding liabilities of interest on the Provident Fund.
These new items build on existing expenditures and programs. In 2021, the Assam government launched the Assam Tea Industries Special Incentive Scheme (ATSIS).
This three-year program gave producers an interest subsidy of 3% per annum on working capital loans and a subsidy of Rs 7 per kg for the production of orthodox and specialty varieties. To help upgrade machinery, the scheme provided a 25% subsidy for the purchase of new equipment for production of orthodox and specialty tea. ATSIS also offered an exemption on agricultural income tax.
Domestic market push
Producers in Assam have been working to strengthen India’s own tea market. Per-capita consumption rose in 2022 to 850 grams, up from 786 g. To sustain the momentum, the Assam government announced a draft tea policy in October that proposed grants for opening tea boutiques in Assam and elsewhere. For producers, it offered a subsidy on costs of certifications.
As the country’s single largest tea-producing region, Assam seems to be taking charge of promotion of tea. NETA set up a tea lounge at the Guwahati Tea Auction Centre, the 50-year-old center at Guwahati, Assam. The lounge showcases the full range of Assam teas and promotes them to visitors. A tea park is being planned near Guwahati as a hub for tea exports. NETA has called for identification and conservation of sites that played a role in India’s tea history. Among them are the Cinnamora Tea Estate, and gardens in Jorhat and Singling in Sivasagar, which were set up by Maniram Dutta Barua, India’s first commercial tea planter. A tea museum is under construction in Guwahati. These projects and various tourism ventures are aimed at supporting consumer interest in Assam tea.
Last year, the Ministry of Commerce, which oversees tea, issued a notice that the Tea Act of 1953 would be repealed and replaced with the Tea Promotion and Development Bill. This will shift the government’s role away from functioning as a regulatory body, as it does now, toward promotion of the industry. Perhaps it will benefit Assam.
Small and large
In the tea sector throughout India, there is a gap between large and small producers. But in Assam, the two segments produce nearly equal amounts of tea. The state hosts 762 tea estates and 122,415 small tea growers, which are defined as those having a farm area of 10 hectares or less. Smallholders in Assam have been better regulated and collectivized than their counterparts in other parts of India.
However, estates still fetch better prices. Average auction prices in 2022 were Rs 290 per kg of estate-produced orthodox tea, versus Rs 252 for orthodox produced by bought leaf factories (BLF). CTC averaged Rs 222 for estate-produced CTC, compared to Rs 166 per kg for BLFs.
NETA and other stakeholders are working to lift quality in the small tea garden and BLF segment. NETA has launched a “Say No to Sickles” campaign, targeted at small growers, to push for a higher standard in plucking green leaf.
As for larger estates, among their challenges are low yields, labor shortages, and high production costs that eat into revenues.
Climate change has probably been the most significant problem in recent years. In June 2022, an 11–21% year-on-year decrease in crop output was reported. Growers attributed the slump to a temperature increase of 1.5 C, lack of sunshine in parts of the state, and heavy rainfall. Both excessive rainfall during monsoons and drought-like conditions in summer have been problematic. The industry aims to cope by adopting irrigation, planting drought-resistant clones, planting more shade trees, and harvesting rainwater.
Innovation
New initiatives and innovations by both estates and small tea growers are buoying the sector. Traditional, export-led estates are venturing into retail products with real success. Goodricke Tea launched four new single-estate teas — Amgoorie, Borgam, Harmutty, and Dejoo — to commemorate the 200-year anniversary.
Assam’s fame has long been its black tea, both orthodox and CTC. What is emerging now is various green teas. Producers like Chota Tingrai Tea Estate have even set up machines to produce green tea in the Japanese style.
Specialty tea is gaining traction. The scale is small, but the broad range and quality of teas indicates potential for growth. Several marquee estates are producing white and oolong teas. Rujani Tea, a brand of the Aideobarie Tea Estate, has a range of whole leaf tea that includes an Assam muscatel, a style made famous in Darjeeling in nearby West Bengal State.
Single-estate CTC is also becoming a tea to reckon with. Bhaskar Hazarika’s Hookhmol has consistently ranked in the top 3 at auctions, earning around Rs 350 per kg for CTC tea, rubbing shoulders with Gatoonga for the top spot. Koliabur retails its CTC for Rs 400 per kg. These kinds of high-quality CTCs outclass commodity blends.
Iron Kettle is an online brand that works with a network of its own farmers. Its plucking quality standard is a minimum count of 70% fine leaf.
Another brand, Oiirabot, works with family farms to market Assam’s traditional teas, like khilang, dheki and hpa kha. In Sivasagar, Woolah Tea works with small tea producers to offer a range of innovative bagless whole-leaf teas that it calls “tea dips.” Says Upamanyu Barkakoty, Woolah’s founder, “It did take some time but we have been able to create a profitable value chain for the organic farmer, with fair wages for more than 140 women now.”
In 2023, Assam tea confronts challenges, but it also shows signs of regeneration. New enterprises are emerging, and young founders are working to advance the industry through new approaches and use of technology. Assam could help drive the progress that is needed throughout India’s tea industry.
See this story and more in the April/May 2023 issue of STiR Coffee and Tea Magazine, free to view or download here
