• Amid US tariffs, SL is looking to expand its tea exports to India by leveraging the existing FTA
• This comes as India surpasses SL to become world’s third-largest tea exporter, escalating competition

Sri Lanka is looking to increase its tea exports to India and build new partnerships with local companies as US tariffs hinder the competitive edge the island nation had for the US.

According to The Hindu Business Line, under the existing free trade agreement (FTA), Sri Lanka is allowed to export 15 million kilogrammes of tea annually to India on a concessional tariff.

However, the island country has been unable to realise its potential.

At a trade meeting organised by the World Trade Centre in Mumbai on Wednesday (20), Sri Lanka’s Consul (Commercial) Shirani Ariyarathne pitched for an increase in trade and collaboration.

“While Sri Lankan tea has a dedicated quota in India, its full potential has yet to be realised. With duty concessions available under the free trade agreement, she affirmed that there is a much greater scope for Sri Lankan exports in the Indian market.

She reassured participants that the Sri Lankan Consulate remains dedicated to supporting trade facilitation and providing timely information to interested businesses,” Ariyarathne said.

The annual report by Agarapatana Plantations PLC said that India has overtaken Sri Lanka as the world’s third-largest tea exporter, as India expanded its production to capture a larger share of the global market in 2024.

The shift in global rankings comes despite an increase in Sri Lanka’s own tea export earnings and volumes, highlighting the intensifying competition and deep-seated domestic challenges facing the island’s iconic Ceylon tea industry.

In 2024, India’s tea production grew to account for 14% of global tea exports, pushing it into the third spot. Meanwhile, Ceylon Tea exports remained static at 13%, making it the fourth-largest tea exporter globally.

Meanwhile, Sri Lanka’s tea production dropped in July year-on-year to 21.36 million kilogrammes, despite cumulative output for the year remains ahead of the past two years, with the total output from January-July reaching 157.12 million kilogrammes, marking an increase of 5.97 million kilogrammes according to data analysis by Forbes and Walker Research.