Coonoor Tea Manufacturers Push Back Against Tea Board Restrictions on New CTC Factories

Tea manufacturers in Coonoor have formally protested against the Tea Board's decision to restrict fresh applications for setting up new CTC (Crush, Tear, Curl) tea factories. Industry stakeholders have warned that the regulatory shift could undermine market competition, deter fresh investments, and adversely impact thousands of small tea growers in the region.

In a representation submitted to the authorities, manufacturers noted that the restriction was introduced without prior consultation with industry participants. They have urged the Tea Board to keep the implementation of the decision in abeyance until stakeholder concerns are thoroughly examined.

According to industry sources, the Nilgiris district currently hosts approximately 200 to 250 bought-leaf tea factories, while about 1,000 such units operate nationwide. Manufacturers pointed out that the Tea Board has not provided a clear rationale for the restrictions. A similar policy enforced several years ago was eventually withdrawn following similar pushback from the industry.

Over the past five years, small tea growers in Coonoor have experienced improved market access following the liberalization of the industry. Growers currently face minimal difficulty in selling green leaves—even during peak production periods—and have secured remunerative prices. The presence of multiple processing facilities and healthy competition among factories have collectively strengthened the bargaining power of growers.

Industry representatives argue that this progress should be objectively evaluated before imposing measures that could reverse these gains. They noted that several existing factories continue to operate with outdated machinery, inefficient manufacturing practices, and limited capacity to process quality tea. This results in lower market realizations and consequently lower prices for growers. Conversely, modern and efficient facilities are capable of producing superior tea from the same green leaf, fetching better market prices and offering competitive rates to growers.

In response to the concerns, the Tea Board stated that the revised guidelines were issued to align with the central government's Ease of Doing Business initiative. The Board added that the measures are intended to support the Indian tea industry's target of achieving 2,000 million kg of production by 2030.

However, manufacturers have reiterated their call for a comprehensive, data-driven assessment covering regional green-leaf availability, factory efficiency, tea quality, market realisations, and the impact of competition. They maintain that the future of the sector should be shaped by transparency, evidence, and stakeholder engagement rather than sudden regulatory restrictions.

"Regulatory changes in traditional sectors must carefully balance broader national production targets with ground-level market dynamics. When policy decisions lack prior stakeholder consultation, they risk disrupting established supply chains and healthy competition. For agricultural and manufacturing ecosystems like Coonoor, sustainable growth relies heavily on continuous technological upgrades, modern processing facilities, and a collaborative dialogue between regulators and local enterprises to protect the interests of small growers and investors alike." — Dr. Shishir Gupta, Founder & CEO, StartupLanes