The ongoing Iran-Israel conflict has raised serious concerns for Indian tea exporters, particularly around the premium orthodox tea variety heavily exported to Iran. Exporters report falling sale volumes and prices due to shipment uncertainties, rising logistics costs, and payment risks.
Despite an overall growth in tea exports during April-May 2025, stakeholders warn that prolonged geopolitical tension could disrupt trade momentum, especially with Iran—India’s key tea market, which saw a 39% YoY export value rise in 2024.
The ongoing conflict in West Asia has triggered serious concerns among Indian tea exporters, particularly regarding shipments to Iran—one of the country’s key markets for orthodox tea. This uncertainty has already begun to affect market sentiment, with stakeholders observing early signs of a decline in both sale volumes and prices of the premium orthodox variety, which Iran typically sources from India.
In addition to demand-side concerns, exporters are increasingly apprehensive about rising freight and insurance costs. These could further complicate shipment prospects to Iran amid its ongoing military conflict with Israel.
Indian Tea Association Chairman Hemant Bangur highlighted that exporters have adopted a cautious stance in sourcing orthodox tea, primarily due to concerns over shipment volumes and payment security. “Exporters have exercised a cautious stance to source orthodox tea through the auction route as they are facing uncertainty over shipment volume to Iran and are concerned about payment. This has pulled both the sale percentage and prices of orthodox teas downward,” Bangur told PTI.
Orthodox tea, known for its premium quality, is a key revenue generator for both planters and traders, helping them realise better returns. Iran alone represents a significant share of this trade.
“Iran is roughly a 35 million kg market for India and is an important trading partner for us. The conflict between Iran and Israel is a matter of worry. Currently, we are waiting and watching. Exporters are in touch with Iranian importers,” Indian Tea Exporters’ Association Chairman Anshuman Kanoria told PTI.
Due to the prevailing uncertainty, exporters are now conservative in their procurement strategies. “In the last few days, the orthodox tea market in terms of sales and prices has been down by roughly 5–10 per cent, and this is mainly because of the uncertainty arising out of the geo-political tension between Iran and Israel. Prior to the conflict, orthodox market sentiment was optimistic. However, we are hopeful for an early solution to the conflict,” Kanoria added.
If tensions escalate further and spread across the West Asian region, exporters fear the disruption could deepen. “If this geo-political conflict persists, it is likely to disrupt the supply chain and adversely impact the overall tea shipment. This may impact the prices of the orthodox variety in the near future. During the April-May period this year, the cumulative orthodox price was Rs 20 a kg higher, while the prices of the CTC variety were flat,” noted Sumit Jhunjhunwala, Vice President and Sector Head at ICRA.
He further added that the broader West Asia region—including Iran, Iraq, Qatar, Saudi Arabia, and the UAE—collectively consumes about 90 million kg of Indian tea annually, making it a critical export destination.
South India Tea Exporters Association Chairman Dipak Shah echoed the growing anxiety over logistics costs. “Iran predominantly buys orthodox tea from north India, but a certain quantity moves out to Iran from south India. There is apprehension among exporters about how the situation will pan out in the next few days. Obviously, nobody wants to venture into a country engaged in a military conflict,” Shah told PTI.
Despite the geopolitical uncertainty, India’s tea exports showed growth in early 2025. According to the Ministry of Commerce, total tea exports during April-May 2025 stood at US$ 135.67 million, marking an 8.87% increase over US$ 124.62 million in the same period last year. Specifically in May 2025, exports reached US$ 66.06 million, up 2.30% from US$ 64.58 million in May 2024.
Iran continues to be a crucial market for Indian tea. In 2023, India exported tea worth US$ 29.38 million to Iran, which rose to US$ 40.82 million in 2024—reflecting a robust year-on-year growth of nearly 39%. However, if the conflict endures, sustaining this growth momentum could become increasingly difficult.
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