US–Iran conflict casts shadow on Assam’s orthodox tea exports; industry fears price shock
Guwahati: The escalating war between the United States-Israel and Iran, and the wider instability across West Asia, are sending ripples of anxiety through India’s tea industry — particularly the premium orthodox segment that depends heavily on exports to the region.
Industry stakeholders in Assam say the unfolding crisis could significantly disrupt trade flows, push up logistics costs and trigger a sharp correction in orthodox tea prices if the conflict persists.
Strong export growth now at risk
India’s tea exports have recorded healthy growth over the past year. Total exports during January–December 2025 rose to 280.40 million kilograms at an average price of Rs 302.73 per kg, compared to 256.17 million kilograms at an average Rs 279.79 per kg in 2024.
North India accounted for 191.11 million kilograms of exports in 2025, of which a substantial 128.47 million kilograms comprised orthodox teas — a high-value variety prized in international markets.
However, much of this growth is closely tied to demand from West Asia.
In 2025, exports to key West Asian markets stood at UAE 50.71 million kg), Iraq (52.59 million kg), Iran (11.25 million kg) and Saudi Arabia (7.94 million kg)
Total exports to West Asia reached 122.49 million kilograms — nearly half of India’s overall tea exports.
“This significant exposure makes the Indian tea industry vulnerable to prolonged instability in the region,” said Dinesh Behani, Secretary of the Guwahati Tea Auction Buyers Association (GTABA).
Orthodox teas face maximum impact
Unlike CTC teas, orthodox teas are largely export-driven, with limited domestic consumption. Any disruption in West Asian markets directly affects demand and pricing.
“Disruption in Iran and other West Asian markets could reduce tea demand, especially for premium orthodox varieties. If alternative global buyers do not absorb the surplus supply, prices may face downward pressure,” Behani said.
For thousands of small tea growers and estate workers in Assam and North Bengal, this is more than a trade statistic. Orthodox tea production supports livelihoods across Upper Assam’s tea belt, where the new season is about to begin.
Rising freight and insurance costs
Beyond demand concerns, the conflict threatens to inflate operational costs. Shipping routes through sensitive maritime zones may become riskier and more expensive.
“If the conflict intensifies or persists, the impact could deepen further — increased freight charges, rising marine insurance premiums, extended transit times and a significant rise in overall transaction costs,” Behani cautioned.
With reports emerging of cargo being struck or damaged in parts of the conflict zone, exporters say it is still too early to assess the full extent of potential business losses.
Short-term cushion, long-term worry
For now, the North Indian tea production season has not yet commenced, limiting immediate supply pressure and preventing a sudden price crash.
However, as the new season begins in Assam — where higher orthodox output is expected — reduced demand from West Asia could result in a sharp price correction.
Given that the domestic market for orthodox tea remains limited, industry experts warn that sustained instability in West Asia could have a direct and painful impact on the Indian tea economy.
As global geopolitics plays out thousands of kilometres away, tea growers in Assam find themselves anxiously watching international headlines — aware that decisions taken in Washington and Tehran could ultimately determine the price of the leaves plucked from their gardens.