NRPPD Webinar Series: Dr. Thiagu Rangananthan

03 June 2022


June 3, 2022 - 3:30 pm


June 3, 2022 - 5:00 pm

Topic: Value Chain Conundrum in the Indian Tea Economy: A Historical Perspective

Presenters: Thiagu Ranganathan, Tirtha Chatterjee, Rucha Takle

This paper chronicles the growth of the tea sector in India, tracing various value chain configurations and transformation in the demand composition over the years. Tea arrived in India in the early 19th century as a fallout of the British empire’s pressing need for an alternative producer other than China. For a significant part of the colonial era, the profitability of plantations was maintained largely through subversion of wages facilitated by laws enabling labour indenture. This phase of wage suppression was followed by improved profitability largely enabled by collusion in international tea markets which artificially spruced up the prices. The subsequent labour struggles paved the way to establishment of the Plantation labour act (PLA) post-independence in 1951. Regulatory oversight in the implementation of this law has severely eroded the upward mobility of plantation labour. The alterations in the tea trade and demand composition post 1960s and the emergence of small tea growers (STGs) since late 1990s has reconfigured the tea sector in a significant way. This reshaping of the tea economy has brought in new value chain conundrums. This paper engages with a historical overview of the emergence of these conundrums in tea and provides possible policy alternatives for engaging with the same.