India’s speciality tea market has expanded to nearly ₹1,000 crore from about ₹300 crore five years ago, driven by growing demand for premium and wellness-oriented teas among younger consumers, according to industry executives.
The segment, which includes matcha, single-origin Darjeeling teas, herbal infusions and wellness blends, is witnessing double-digit growth as health-conscious millennials and Gen Z consumers increasingly opt for premium beverages over conventional tea.
“This momentum is being driven by rising health awareness, premiumisation and growing interest in teas that offer both functional benefits and a distinctive origin story,” said Rudra Chatterjee, Managing Director of Luxmi Tea, which owns the Makaibari tea brand.
Tea companies are shifting their focus from volume-led growth to higher-value products, betting that consumers are willing to pay a premium for teas that combine wellness, authenticity and traceability.
Industry executives said the rapid expansion of e-commerce and quick commerce platforms has made speciality teas more accessible beyond metro cities, helping brands reach consumers in Tier-II and Tier-III markets.
Ketan Desai, Director on the Board of the European Speciality Tea Association, said speciality tea is becoming increasingly mainstream in India, aided by changing consumer preferences and café culture.
“The popularity of speciality coffee has helped familiarise consumers with the concept of speciality beverages, and now matcha tea is emerging as a major trend among Gen Z,” he said, adding that the successful production of matcha in Assam reflects the growing opportunities in the segment.
Direct-to-consumer (D2C) tea brands are also using speciality teas to differentiate themselves from mass-market players. According to industry executives, online marketplaces are witnessing a rise in listings of premium teas from startups as well as small tea growers, including hand-rolled white and green teas, muscatel Darjeeling teas and purple teas.
Bala Sarda, Founder and CEO of Vahdam Tea, said the Covid-19 pandemic marked a turning point for the category, accelerating demand for speciality teas, herbal infusions and wellness beverages.
Social media, café culture and global food trends have further boosted the popularity of newer tea formats such as cold brews, tea mocktails and tea-based non-alcoholic beverages among younger consumers.
Industry executives believe premiumisation represents the next phase of growth for India’s tea industry, where per capita consumption has largely plateaued.
“We believe the next phase of growth will come not from increasing the number of cups consumed, but from increasing the value consumers derive from every cup. That is where quality, wellness and innovation come together,” Chatterjee said.