Tea industry gives Assam Budget thumbs-up for export subsidy, tax relief

Shillong, India Jul 11, 2026 ALN: The Assam tea sector, encompassing various associations of planters and traders, has expressed strong approval for the recent budget announcements regarding subsidies, incentives, and tax relief. These measures are anticipated to significantly bolster the industry, which is a vital component of Assam's economy and cultural identity.

The budget, presented in the assembly on Friday, outlines initiatives designed to help the tea industry maintain its global market share while fostering socio-economic development for its workforce. Assam is one of the largest tea-producing regions in the world, and its tea estates are integral not only to the local economy but also to the livelihoods of millions of people. The tea industry in Assam has faced numerous challenges, including fluctuating prices, increasing production costs, and competition from other tea-producing countries, making these budget announcements particularly timely.

The Guwahati Tea Auction Buyers Association (GTABA) hailed the introduction of a Rs 3 per kg export subsidy for premium CTC tea as a groundbreaking initiative. CTC, which stands for Crush, Tear, Curl, is a method of processing tea that is particularly popular in the Indian market and is known for its strong flavor and dark color. The introduction of this subsidy is expected to provide a much-needed competitive edge for Assam's tea exporters, who have been grappling with rising logistics costs and stiff competition from other tea-producing nations like Kenya and Sri Lanka.

GTABA secretary Dinesh Bihani emphasized that this marks the first dedicated export incentive specifically for premium Assam CTC tea. This move is seen as a strategic effort to enhance the marketability of Assam's premium tea products on the international stage. "This subsidy will enable exporters to stay competitive in the global market, particularly as the industry faces escalating competition and rising logistics costs. It will also enhance price realization throughout the value chain," Bihani stated, highlighting the cascading benefits that such a subsidy can provide from producers to consumers.

He further noted that the Guwahati Tea Auction Centre (GTAC), which is India's largest CTC tea auction house, is expected to reap substantial benefits from this initiative. The GTAC plays a crucial role in determining the pricing and distribution of Assam tea, and with increased competitiveness, it may attract more buyers and boost auction volumes.

The Tea Association of India (TAI), representing planters, affirmed that the budget has provided a significant boost to the tea industry across various dimensions. TAI's endorsement of the budget reflects a collective optimism among tea stakeholders regarding the future of the industry. "The tea sector has long been a cornerstone of the state’s economy and plays a crucial role in employment generation," remarked TAI secretary general PK Bhattacharjee.

Bhattacharjee praised the subsidies for both orthodox and premium CTC tea, asserting that the enhancement of the Assam Tea Industries Special Incentives Scheme (ATISIS) will further empower the industry. The ATISIS has been a vital support mechanism for tea producers, offering subsidies and incentives that can help improve productivity and sustainability in tea cultivation.

Additionally, the reduction of VAT on piped natural gas from 14.5% to 5% is expected to lower production costs for tea estates utilizing piped natural gas. This reduction is particularly significant given the energy-intensive nature of tea production, where heating and processing require substantial energy input. Lower energy costs could lead to improved profit margins for tea growers, enabling them to invest more in their operations and workforce.

He also highlighted the proposal to establish the Assam Tea and Golf Trail, an innovative tourism initiative that aims to integrate Assam's esteemed tea estates with its golf courses, thereby creating a world-class experiential tourism circuit. This initiative not only seeks to promote Assam's rich tea heritage but also aims to attract tourists, thereby generating additional revenue streams for local communities.

Continuing the compensation of Rs 15,000 under the Wage Compensation Scheme for pregnant women working in tea garden areas will ensure improved maternal care and nutrition, according to the TAI official. This aspect of the budget underscores the government's commitment to social welfare, particularly in a sector where labor conditions have historically been a concern. Improving maternal health among tea workers can have long-term benefits for families and communities, contributing to better health outcomes for future generations.

In his inaugural budget presentation, State Finance Minister Jayanta Mallabaruah announced the Rs 3-per-kg subsidy for export-oriented and premium Assam CTC tea, marking a first for the state. This bold move reflects the government's recognition of the tea industry's significance and its potential for growth. The production subsidy for orthodox and specialty tea will increase from Rs 10 per kg to Rs 15 per kg, with premium Matcha tea now included under this scheme, further diversifying Assam's tea offerings.

To further support small tea growers, the government proposed raising the agricultural income tax exemption threshold from Rs 2.5 lakh to Rs 10 lakh in annual agricultural income. This adjustment is aimed at easing the financial burden on smallholders, many of whom struggle to maintain profitability in a competitive market. By increasing the exemption threshold, the government is acknowledging the challenges faced by smaller producers and providing them with greater financial flexibility.

Simultaneously, the tax will be reinstated for larger assessees starting April 1, 2026, with the additional revenue earmarked specifically for the welfare of tea garden communities, as stated by Baruah. This approach aims to ensure that larger producers contribute to the social and economic development of the communities from which they derive their profits, fostering a more equitable distribution of resources within the industry.

He added that the government will continue to support tea growers through the Assam Tea Industries Special Incentives Scheme (ATISIS), alongside initiatives aimed at enhancing healthcare facilities and promoting tea tourism. The intertwining of economic support with social welfare initiatives highlights a holistic approach to the development of the tea sector in Assam, addressing both the financial viability of tea production and the well-being of those who work in the industry.

In conclusion, the positive response from the Assam tea industry to the recent budget announcements reflects a collective hope for a revitalized sector that can adapt to global challenges while prioritizing the welfare of its workforce. The measures outlined in the budget are expected to not only enhance the competitiveness of Assam's tea in international markets but also improve the living conditions of those who contribute to this historic industry. As Assam continues to navigate the complexities of the global tea market, the support from the government through strategic subsidies and incentives will be crucial in ensuring the sustainability and growth of this vital sector.