One customer, paid in rupees
From the 1970s the Soviet Union and its allies bought about 80% of Nilgiri tea under a rupee-trade arrangement. They wanted strong, cheap tea in bulk, and the hills made exactly that. There was little reason to make anything finer.
The rouble falls, the rules change
When the USSR broke up, the rupee-trade system ended. A 1993 treaty with Russia required payment in hard currency, and Vietnam, Kenya and China moved into the Russian market, China offering tea at about ₹16 a kilo. Indian tea exports to Russia fell from 67 million kg in 2001 to 47 million kg in 2002.
What it meant on a half-hectare plot
A small grower who got up to ₹21 for a kilo of green leaf in 1997-98 now got ₹3–5, while fertiliser had gone from ₹400 to ₹700 a 100 kg. Four kilos of leaf make one kilo of tea: when tea sold at auction for ₹33, about ₹18 went to the grower and ₹15 to the factory. Growers also accused some bought-leaf factories of lowering quality, which pulled prices down further.
When one buyer takes 80% of what you make, its problems become yours.
A slow turn to quality
Planters had begun pushing toward Western tastes as the Soviet economies wavered: orthodox rolled teas, white teas, single-estate names and certifications. Nilgiri tea became a GI in 2008. But in 2025 the district’s 46,481 small growers were still asking for a minimum price for green leaf and a floor price at auction.
Points for a finance reader
- Cap your share with any one buyer. Eighty percent with one customer is not a market. It is a dependency.
- Know your cost per kilo of output. When four kilos of leaf make one of tea, a grower’s cost and price must be compared on the same basis.
- Quality is the way out of a commodity trap. Bulk tea competes on price with the world. Named, better tea competes on taste.