Assam's 2026-27 budget introduces Rs 3/kg export subsidy for CTC tea, raises orthodox support
Assam's FY 2026-27 state budget introduces a first-ever subsidy for export-oriented, quality CTC tea and raises the orthodox tea subsidy under ATISIS 2020 from Rs 10 to Rs 15 per kg. The Tea Association of India called the budget progressive and forward-looking for the sector.
Assam budget targets tea exports and forex earnings
The Assam state budget for FY 2026-27 has introduced new incentives for the tea sector, including a first-time subsidy for export-oriented, quality Assam CTC tea. The Tea Association of India welcomed the proposals, describing the budget as one of the most progressive and forward-looking for the tea industry and noting its focus on capital expenditure and long-term sustainability.
State Finance Minister Jayanta Malla Baruah presented the plan as his maiden budget. According to the budget reaction, the export-oriented CTC tea subsidy is set at Rs 3 per kg. The Tea Association of India said the introduction of a subsidy for export-oriented quality Assam CTC tea would encourage exports and increase foreign exchange earnings.
Changes to subsidy support
PK Bhattacharjee, Secretary General of the Tea Association of India, said the budget builds on the Assam Tea Industries Special Incentive Scheme (ATISIS) 2020, notified in November 2020, which over the last four years has provided interest subvention, production-linked incentives for orthodox and speciality teas, support for factory capital investment, and agricultural income tax holidays. The key changes proposed are:
- Introduction of a subsidy for export-oriented quality Assam CTC tea, reported at Rs 3 per kg;
- An increase in the orthodox subsidy under ATISIS 2020 from Rs 10 to Rs 15 per kg;
- Inclusion of matcha tea in the eligible category of orthodox and speciality tea;
- A reduction of VAT on piped natural gas from 14.5 per cent to 5 per cent.
Lower production costs
The Tea Association of India said the VAT cut on piped natural gas, from 14.5 per cent to 5 per cent, would reduce the cost of production for tea estates connected to the piped gas network. CTC is the bulk grade that dominates Assam's output, while orthodox and speciality teas serve higher-value and export markets; the higher orthodox subsidy and the new CTC export incentive together aim to lift both volumes and value.
Tourism and welfare measures
Beyond direct subsidies, the budget proposes the Assam Tea and Golf Trail, a tourism initiative linking the state's tea estates with its golf courses to develop an experiential tourism circuit in partnership with tea estates, the tourism and hospitality sectors, and local communities. The Tea Association of India also welcomed measures to strengthen tea garden hospitals through improved infrastructure, diagnostics, medicines, equipment and dedicated medical staff, alongside last-mile healthcare via Atal Mobile Medical Units, Arogya Biman medical drones, hospital ships, Jan Aushadhi Kendras and expanded telemedicine reaching tea garden areas. Continued wage compensation of Rs 15,000 for pregnant women in tea garden areas, along with community halls, PMAY-G housing, model high schools and pucca roads in labour lines, were cited as support for the tea garden community.
