The ongoing conflict in West Asia is beginning to bite into India’s orthodox tea exports, industry officials warn, with exporters facing a sharp decline in orders, higher insurance costs, longer transit times and payment uncertainty. The effects have become visible over the past six to eight weeks, particularly for orthodox varieties that traditionally ship to West Asian buyers, said Dinesh Bihani, Secretary of the Guwahati Tea Auction Centre (GTAC).

The West Asia crisis is reverberating across India’s economy, tightening energy supplies, raising crude and refining costs and disrupting key trade routes through the Strait of Hormuz. Domestic fuel prices (petrol, diesel, LPG, CNG) have come under upward pressure, pushing inflation risks and straining household budgets. Export sectors that rely on West Asian markets and shipping- from orthodox tea to certain petrochemicals and foodstuffs- are seeing falling orders, longer transit times, higher insurance premiums and payment uncertainties. The geopolitical shock also complicates India’s energy security calculus, prompting renewed focus on supply diversification, strategic stockpiles and diplomatic engagement to stabilise shipments and reassure traders and insurers.

Impact visible in orthodox segment

“We have started experiencing the effects of the West Asia crisis within Orthodox Quality tea over the past 1.5 months. Its demand is gradually declining and the main reason is that our tea, which used to be sent to West Asia, takes 45 to 50 days to reach there,” Dinesh Bihani told news agency ANI, describing how extended sea routes and delays have eroded buyers’ appetite. The longer transit not only raises logistics costs but magnifies risks for perishable‑sensitive consignments and adversely affects delivery schedules.

Rising insurance costs and payment insecurity

Dinesh Bihani said a sharp uptick in marine insurance premiums is squeezing exporters’ margins. “Insurance costs have increased significantly and orders are also coming in smaller quantities. There’s no complete security for payments either,” he said, adding that buyers are either seeking shorter shipments or delaying purchases until geopolitical clarity returns. Exporters now face the twin challenge of covering higher risk‑related costs while negotiating smaller, more cautious orders.

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Downward pressure on prices and potential pivot to CTC

The GTAC secretary warned that prolonged disruption could force a shift in product mix or price realignments. “If the war situation doesn’t improve in the coming months, we may have to revert to the crush‑tear‑curl (CTC), or our tea will be sold at a lower price,” Dinesh Bihani said, referring to the CTC segment that caters more to domestic and different international buyers and usually fetches lower prices than orthodox teas like Darjeeling and Assam whole‑leaf varieties.

New markets and diversification hopes

Despite immediate pains, Dinesh Bihani pointed to efforts to diversify markets. “We have discovered new markets for export. Russia is also a huge market for us. Let’s see what the war situation is like in the future; only then will we be able to comment further,” he said, highlighting that exporters are actively seeking alternative destinations to offset West Asia weakness.

The concerns arrive against a backdrop of strong long‑term growth in India’s tea exports. Union Commerce and Industry Minister Piyush Goyal had noted in May that the tea export sector’s value rose to Rs 8,719 crore in 2025‑26 from Rs 4,509 crore in 2013-14—a near 93 per cent increase. India’s famed tea regions- Assam, Darjeeling and Nilgiri- continue to enjoy global recognition, but orthodox exporters, which rely on specific international buyers and premium pricing, are particularly vulnerable to route disruptions and risk premia.

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Industry implications and next steps

Market participants say the immediate priorities are managing logistics costs, renegotiating terms with buyers, securing insurance cover at sustainable rates and accelerating market diversification. Auction houses and exporter associations may also work with the government to seek temporary relief measures or diplomatic assistance to facilitate trade financing and secure payment channels. If disruptions persist, a structural shift in export flows or temporary reorientation of production to different grades could follow.

What exporters are watching?

Exporters will closely monitor developments in West Asia, insurance markets and freight routes, along with demand signals from alternative buyers such as Russia, Southeast Asia and Africa. The speed at which shipping lanes stabilise and insurers temper premiums will determine whether orthodox tea shipments can regain momentum or continue to face margin and demand pressures.

While India’s tea sector has shown resilience and export growth over recent years, the West Asia conflict has exposed vulnerabilities in orthodox tea exports that depend on long transit times and concentrated buyer bases. Industry leaders say diversification and government engagement will be crucial to cushion the immediate shock and preserve premium tea revenues.