India's vital tea industry, particularly in Assam, is experiencing a significant downturn in production due to extreme weather patterns and new European Union regulations. The region's distinctive Assam and Darjeeling teas are facing diminished harvests as prolonged dry spells and rising temperatures impact cultivation.
In 2024, Assam's tea output fell by 7.8% to just under 1.3 billion kilograms. This reduction in yield has coincided with a nearly 20% increase in tea prices. Tea pickers are reporting a drastic drop in their daily yield, with some collecting only about 60 kilograms of leaves, a stark contrast to their previous capacity of 110 kilograms. These reduced yields place considerable strain on an industry already burdened by shrinking profit margins and significant debt, hindering essential investments in plantation maintenance, modernization, and developing climate-resilient tea varieties.
The quality of Assam tea is also reportedly compromised by these climatic challenges and an increase in pest infestations. Historically, Assam has been a cornerstone of global tea production since the early 1820s when the British East India Company established large-scale plantations. The industry's growth has been significantly shaped by the labor of women, who constitute over half of the workforce.
Adding to these pressures are upcoming European Union regulations, set to take effect in May 2025, which will restrict the use of certain pesticides. These changes could impact over 40 million kilograms of high-end Assam tea exports to the EU and the United Kingdom, markets that historically import substantial quantities of Indian tea. The EU's intention to lower the Maximum Residue Limit (MRL) for specific pesticides, including Thiacloprid, Thiamethoxam, and Clothianidin, is a primary concern. The industry is actively seeking a transition period from the EU to adapt to these new standards, with diplomatic talks scheduled to address the issue.
Domestically, the Food Safety and Standards Authority of India (FSSAI) is implementing stricter MRLs and capacity-building programs for planters to ensure compliance and enhance export safety. The broader challenge of Non-Tariff Measures (NTMs) from various countries also necessitates a comprehensive strategy for market access. The industry's ability to adapt to these evolving regulatory landscapes, alongside climate resilience, will be crucial for its sustained success and global competitiveness.