Darjeeling’s tea industry has had a rough decade — the yields have fallen, a massive political strike brought work to a standstill, and competition is choking the life out of it. It’s in dire need of help.

So in today’s Finshots, we dive into what went wrong with this iconic tea.

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The Story

Nestled in the picturesque Himalayan foothills lie 87 enchanting tea gardens that produce what’s known as the champagne of teas. We’re talking about Darjeeling Tea.

But right now, the fate of this iconic tea is in jeopardy. Last year, nearly half of Darjeeling’s tea estates were put up for sale. And a week ago, the Chairperson of the Indian Tea Exporters Association (ITEA) said that the industry is like a 'patient in ICU'.

So, how did Darjeeling tea come to this?

Let’s take it from the top.

See, in the 1800s, China monopolised the tea trade. And the British wanted to break the monopoly. So in came Robert Fortune, an officer of the East India Company who agreed to smuggle tea out of China. Through nifty disguises, he surreptitiously moved over 20,000 tea seedlings and plants to India. And since the British had decided to establish a hill station near Calcutta, it made its way to Darjeeling.

And that’s how Darjeeling’s tea journey began roughly 200 years ago.

But there’s something you should know about tea. Most of the tea bushes yield high-quality tea for about 50 years. It loses lustre after that period. So they need to go through a replanting exercise. But maybe the problem was that after Independence, we ignored that matter. Planters continued cultivating the same bushes because it would take a lot of money and effort to conduct such a restoration. And by the early 2000s, reports say that almost every tea estate was more than 85 years old.

You can imagine the outcome right?

The yields were dropping significantly. Farmers were simply not able to get enough bang for their buck. And that was the first sign of distress.

Now that also opened up an opportunity for a rival. And Nepal tea, a close cousin of the Darjeeling tea, latched on to it with both hands. They realised that since both teas grow in similar climates, most people would find it hard to tell them apart. Also, they had the added advantage of lower labour costs which translated to lower prices.

And guess what happened?

Indian tea makers started importing Nepal tea and blending it with our Darjeeling variety. This would then be re-exported to all parts of the globe. In some cases, the makers would still call it Darjeeling tea even though it technically wasn’t.

Something had to be done to protect Darjeeling’s tea industry. So we got a GI (Geographical Indication) tag in 2004. Think of a GI tag as a marker of authenticity. If people saw the tag, they’d know it was from Darjeeling itself. No other tea could be passed off as Darjeeling tea. And that would put an end to the influx of Nepali tea.

But even that didn’t work out.

Why, you ask?

Some experts think that we didn’t do enough to protect and market it well. Typically, GI-tagged products command a premium. But in the case of Darjeeling tea, prices remained stagnant. Maybe folks had seen that despite the GI tag, unfettered blending continued and they didn’t want to pay a premium. Maybe not replanting bushes meant that the quality was sub-par. We don’t know for sure.

But the end result was that even though India produced only around 8.5 million kg of Darjeeling tea, 50 million kg worth of Darjeeling tea was floating around in the global markets.

Also, there was new competition in the tea market. Our neighbour down south began promoting its own GI-tagged Ceylon tea in a big way. And that probably hurt Darjeeling tea’s fortunes a fair bit too.

And then came the final nail in the coffin.

In 2017, there was a massive strike in Darjeeling. There were calls for a separate state for the Gorkha community. And work in the tea estates came to a standstill. For a long drawn 104 days. This came bang in the middle of the growing season. Weeds took over. Leaves went untrimmed. And because these tea bushes take 7-8 years to mature, neglecting their upkeep meant that it was back to square one. It set the industry back by a few years.

And Nepal tea rushed in to fill the void. Between FY18 and FY21, 96% of all of Nepal’s tea exports wound up in India. Tea makers had no choice but to resort to blends. And the iconic Darjeeling tea was slowly fading away.

Now the government has been making some attempts to save the industry.

In November 2021, it asked tea makers to stop blending Nepali tea with Darjeeling tea. Even if the end product was just being marketed as regular tea, it didn’t want to take a chance.

But even this ban was short-lived.

You see, big tea-buying conglomerates like Tata Consumer Products and Hindustan Unilever scaled back their purchases of Darjeeling tea after this policy. They probably felt that they weren’t trying to pass off anything in a clandestine way, so why shouldn’t they blend varieties if they were being honest about it.

This led to a crash in prices.

And that spooked the government. Their policy had backfired. So within 11 months, they rolled it back and allowed blending to continue. But there isn’t much to suggest if it reinvigorated the industry.

So the only question is — can we possibly restore Darjeeling tea’s lost glory?

Well, one idea being bandied about is a 100% anti-dumping duty on Nepali tea. Because right now, tea originating from Nepal can be freely imported under the India-Nepal Free Trade Agreement (FTA). So maybe this would put an end to the threat from our neighbour.

But even if that works, that still doesn’t address the problem of a continuing decline in yield. Or what the tea industry says is a lack of financial support from the government.

And without that, it doesn’t seem like the Champagne of teas can get back its glory days.

Until then…

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