The deepening energy relationship with Russia could indirectly provide a tailwind for Indian orthodox tea exports, stakeholders said.
Russia continues to be a major destination for Indian tea, with demand for premium orthodox varieties showing greater resilience than the broader Russian market, according to Anil George Joseph, president of the Tea Trade Association of Cochin.
In FY26 (April 2025–March 2026), India exported around 31.32 million kg of tea to Russia, making it the country’s third-largest destination by volume after the UAE and Iraq. Russia accounted for roughly 6.6 per cent of India’s total tea-export value.
However, exports to Russia weakened during 2025. Between January and August, Indian tea shipments to the country stood at 20.84 million kg, compared with 26.92 million kg during the corresponding period of 2024—a decline of about 23 per cent.
$70 b trade
Joseph said the performance of orthodox tea was considerably better than the overall Russian import trend suggested. Bilateral trade has become heavily skewed towards Russia following India’s sharp increase in crude-oil purchases. Trade between the two countries reached around $70 billion in 2024, largely driven by Russian oil exports to India, while India’s exports to Russia remained comparatively small.
The imbalance had historically resulted in Russia accumulating large amounts of Indian rupee liquidity. However, the payments mechanism has improved substantially. According to Russia’s Sberbank, around 96 per cent of India-Russia bilateral trade is now being settled through rupee-rouble mechanisms, with most transactions processed rapidly. This could make it easier for Russian importers to purchase Indian goods, Joseph said.
“The oil relationship can therefore indirectly support Indian orthodox tea exports,” Joseph added. Russia has accumulated greater rupee liquidity through bilateral trade, while Indian exporters and Russian importers face fewer settlement difficulties. Both Moscow and New Delhi have also expressed a policy objective of increasing Indian exports to Russia. The enormous trade imbalance means there is considerable scope for Russia to use its rupee holdings to purchase Indian goods, he said.
Paying premium
India imported roughly $63.8 billion worth of goods from Russia in FY25, compared with exports of only about $4.9 billion. Nevertheless, tea demand ultimately depends on market fundamentals. Russian consumers and blenders still need tea, and Indian orthodox varieties remain competitive in terms of quality and price, Joseph added.
“Exports of teas have definitely increased to Russia. They are buying quite a lot of orthodox teas from South India, which they find it attractive. Also they pay a good premium.” said N Lakshmanan Chettiar of Golden Hill Estates, a manufacturer and exporter of orthodox teas in Coonoor.
Further, there is a renewed demand for orthodox teas, Lakshmanan said adding that “I think it is because they have too much of oil credits over here, they are buying quite a lot of teas from here.”
India’s overall tea exports recorded a strong performance in FY26. Exports during April 2025–March 2026 rose 5.45 per cent to 271.93 million kg from 257.88 million kg a year earlier. Average export realisation also increased from ₹290.97 per kg to ₹307.04 per kg.
Rising value
The trend subsequently softened. During January–July 2026, India’s tea exports fell 16.11 per cent to 128.56 million kg. However, average realisation increased 2.76 per cent to ₹304.04 per kg.
Joseph said the combination suggests that although volumes have weakened, the value realised per kilogram has remained relatively firm, partly reflecting a more favourable product mix.
“Orthodox tea, however, has proved more resilient than commodity CTC grades. Continued buying interest at the Kochi auctions, where around 95 per cent of orthodox offerings were recently sold, indicates that exporters remain willing to support quality orthodox teas.” Joseph added.
For Indian exporters, particularly those targeting Russia and the CIS, the emerging trend is therefore less about a broad-based recovery in tea volumes and more about a shift towards higher-value teas. “Premium orthodox varieties appear better positioned to benefit from this change, supported by demand for quality, competitive pricing and an improving India-Russia payments framework,” Joseph said.
Captive domestic offtake
Dipak Shah, Chairman of the South India Tea Exporters Association, said that Russia has traditionally been a major buyer of orthodox tea, even as CTC teas gradually gained prominence in India. Even today, Russian buyers prefer orthodox teas, which is one reason Sri Lanka commands a premium, as it produces very little CTC tea. India, by contrast, is predominantly a CTC-producing country, largely driven by captive domestic consumption.
“It is difficult to ascertain the extent of renewed demand, but we have to keep in mind the ensuing winter months, which could disrupt shipping schedules. Even in the current scenario, buyers would like to be properly stocked due to the highly unstable political situation,” Shah said.
Pointing out to the changing consumption patterns in the tea market, Shah said “We should keep in mind that there has been a change in some patterns, with loose teas declining while packet teas and tea bags are finding an easier market. Keeping in mind the growth in this segment, CTC small-leaf teas may do better in the coming years.”
Orthodox tea prices have generally increased over the last six months, particularly for good-made-leaf teas, which remain competitively priced compared with Sri Lankan teas.
“Good-made orthodox teas seem to have a better future,” Shah said.