Syllabus: G S–  III  & V: Agriculture

Why in the news? 

The ongoing conflict involving Iran, Israel and the wider Middle East region has raised serious concerns for India’s tea industry, particularly the export of Assam’s orthodox tea, which heavily depends on West Asian markets.

Why the Conflict Matters for Assam’s Tea Industry

Assam is globally famous for its tea, especially orthodox tea, which is considered a premium variety. However, the industry has recently been exposed to geopolitical risks due to its heavy dependence on West Asian markets.

• Nearly 50 percent of Assam’s orthodox tea production is consumed by Iran and other Middle Eastern countries.
• Any disruption in the region directly affects export demand, shipping logistics and price stability.

With escalating tensions in West Asia, the tea industry fears shipment disruptions, payment risks and falling prices due to surplus supply.

Understanding Orthodox Tea

Orthodox tea refers to traditionally processed tea leaves, rolled gently to maintain their natural shape.

Key features include:

• Premium quality and distinctive flavour
• Higher export value compared to Crush-Tear-Curl tea
• Strong demand in international markets, especially West Asia

Assam produces both orthodox tea and Crush-Tear-Curl tea, but orthodox varieties dominate export markets.

Export Dependence on the Middle East

India achieved a record tea export of about 280 million kilograms in 2025.

Key importing countries include:

• Iraq – about 48.88 million kilograms
• United Arab Emirates – about 45.66 million kilograms
• Iran – about 10.69 million kilograms

Many shipments to Iran are routed through Dubai, which acts as a re-export hub for West Asian markets.

Overall, West Asian countries purchase nearly half of India’s tea exports, making the region extremely important for Assam’s tea economy.

Major Risks Created by the Conflict

The current geopolitical situation creates several challenges.

1. Disruption of Trade Routes

The Strait of Hormuz, one of the world’s most important shipping corridors, connects the Persian Gulf to global markets.

• Any disruption can severely affect cargo transport and maritime trade.
• Tea shipments could face longer transit times and higher freight costs.

2. Payment and Financial Risks

Iran already faces international sanctions, making payment channels fragile.

The conflict increases the risk of:

• Payment delays
• Contract cancellations
• Financial losses for exporters

3. Price Volatility

If exports slow down, surplus tea will remain in the domestic market.

This may cause:

• Sharp fall in prices, especially for premium orthodox tea
• Reduced income for tea growers and exporters

Government Policy Support

To support the sector, the government has implemented several initiatives.

Tea Development and Promotion Scheme

This programme aims to:

• Improve tea quality and productivity
• Support small tea growers
• Promote exports and branding

Between 2021 and 2026, around ₹150 crore was spent in Assam under this scheme.

Orthodox Tea Production Incentives

The Assam government increased subsidy from:

• ₹10 per kilogram to ₹15 per kilogram

This encouraged producers to shift from Crush-Tear-Curl tea to orthodox tea, which commands higher prices globally.

Climate Change: An Additional Challenge

Apart from geopolitics, climate change also threatens tea production.

Assam’s tea gardens have recently experienced:

• Deficient rainfall
• Rising temperatures
• Declining tea quality

Climate forecasts suggest that these risks may intensify in the future.

Experts suggest using artificial intelligence tools to monitor:

• Weather patterns
• Market trends
• Export risks

Strengthening Domestic Demand

One long-term solution is to expand domestic consumption of orthodox tea.

Currently:

• Domestic markets mainly consume Crush-Tear-Curl tea
• Orthodox tea consumption remains limited

Possible strategies include:

• Promoting tea’s health benefits among youth
• Improving branding and packaging
• Strict food safety standards to build consumer trust

Some industry stakeholders have also suggested declaring tea as India’s national drink to promote consumption.

Key Terms Explained

• Orthodox Tea: Traditionally processed premium tea leaves exported mainly to international markets.
• Crush-Tear-Curl Tea: Machine-processed tea used widely for tea bags and domestic consumption.
• Strait of Hormuz: Strategic maritime route through which a large portion of global oil and trade shipments pass.
• Geopolitical Risk: Economic risk arising from political tensions or conflicts between countries.
• Re-export Hub: A trading centre where imported goods are exported again to other countries.

Way Forward

To protect Assam’s tea industry, experts recommend:

• Diversifying export markets beyond West Asia
• Strengthening domestic demand for orthodox tea
• Investing in climate-resilient tea cultivation
• Improving global branding of Assam tea

Such measures can reduce dependence on geopolitically sensitive markets.

Exam Hook

Key Takeaways

• Around 50 percent of Assam’s orthodox tea exports depend on Iran and the Middle East.
• The West Asian conflict exposes the vulnerability of export-dependent agricultural sectors.
• Strengthening domestic demand and market diversification is crucial for long-term stability.

Mains Question

“Global geopolitical conflicts increasingly affect agricultural export sectors. Discuss with reference to Assam’s orthodox tea industry.”

One line wrap: The crisis in West Asia reveals how deeply global geopolitics can influence Assam’s tea economy, highlighting the urgent need for market diversification and stronger domestic consumption.

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