Uddhab Chandra Sarmah
(ucsarmah@gmail.com)
The Middle East war is creating significant uncertainty for the Assam tea industry in early 2026, just as the new production season begins. While production has started to pick up with recent rainfall, the conflict threatens key export markets, particularly for Assam’s orthodox tea, with nearly 50% of this variety traditionally consumed by Iran and other Middle Eastern countries.
Here is a breakdown of the impact as of March 2026:
1. Severe Risk to Orthodox Tea Exports:
Key Market Instability: Iran, Iraq, and the UAE (a crucial re-export hub) are major buyers of Assam’s orthodox tea. Ongoing conflict, particularly around the Strait of Hormuz, threatens to disrupt these shipments.
Declining prices: Exporters fear that if the conflict continues, a build-up of unsold tea stocks in India will occur, leading to a surplus and potentially forcing down tea prices.
2. Increased logistics and operational expenses:
n One immediate impact of conflict is the surge in fuel prices, which increases transportation expenses from tea gardens to auction centres like the Guwahati Tea Auction Centre. It also raises input costs, such as fertiliser, packaging, and machinery operations.
n Shipping Bottlenecks: Insurance premiums for shipping through the region have increased sharply due to the conflict.
n Payment uncertainties: The conflict has exacerbated fragile payment channels with Iran, resulting in payment risks and potential contract cancellations.
n Alternative routes: Using alternative trade routes is proving to be both risky and expensive, as they often involve longer transit times, increased tariffs, and potential disruptions due to geopolitical tensions.
3. Impact on production and transition:
n Production shift risks: Last year, many tea producers converted their production from CTC to higher-value orthodox tea. The current crisis threatens this strategy, potentially forcing producers to revert to CTC tea, which has faced stagnant prices.
n Timing: The conflict has intensified just as the new season’s production—which relies on these exports—is beginning, causing concern for small tea growers in Tinsukia and Dibrugarh.
4. Mitigation efforts and government support:
Assam government support: To combat the potential downturn, the Assam government has released Rs 94.7 crore to support 486 tea gardens and has proposed a subsidy increase to Rs 15 per kg for orthodox tea.
The tea industry must respond proactively by diversifying markets, improving cost efficiency, adopting sustainable practices such as renewable energy, and enhancing branding to position Assam tea as a premium global product. Strengthening the domestic market through urban tea culture and innovative products is equally important, as it can help create a loyal customer base and increase demand for Assam tea within the region.
In conclusion, the Middle East conflict serves as a reminder that global uncertainties are inevitable. The Assam tea industry must embrace resilience, adaptability, and innovation to navigate these challenges. Assam can become stronger and more competitive on the world stage if the government and businesses work together.
Despite the threats, some stakeholders are hopeful that a swift resolution will allow the industry to meet the strong demand seen in 2025, where exports reached an all-time high. In summary, the war acts as a severe drag on the high-value, export-orientated segment of the Assam tea industry at a time when producers were hoping to capitalise on a “better export” cycle.