Assam tea subsidy boost has gained fresh momentum after the state government revised its tea incentive framework to encourage orthodox and speciality tea production. The revised Assam Tea Industries Special Incentives Scheme (ATISIS), 2020, was notified on September 18, 2026.
Under the revised scheme, the production subsidy for orthodox and speciality tea has increased from ₹10 to ₹15 per kg. The government has also brought Matcha tea into the incentive framework and increased the maximum annual claim to ₹1 crore per unit or garden.
The changes also strengthen support for working capital and exports. Consequently, the revised policy places greater emphasis on value-added tea, organised auctions and Assam’s position in premium domestic and international markets.
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Assam Tea Subsidy Boost Raises Support for Premium Varieties
The Assam tea subsidy boost centres on the increase in production support for orthodox and speciality teas. The subsidy has risen 50%, from ₹10 per kg to ₹15 per kg under the revised ATISIS framework.
Orthodox tea differs from the Crush, Tear, Curl (CTC) method and includes several premium varieties. Assam’s incentive framework covers products such as green, white, Oolong, Singhpo, purple and yellow teas, along with other speciality varieties that are not manufactured through the CTC process.
The revised scheme also officially includes Matcha tea among the eligible categories. This change reflects the state’s effort to expand beyond conventional CTC production and encourage higher-value products.
Assam’s Budget 2026-27 had first announced the higher subsidy. Finance Minister Jayanta Malla Baruah proposed increasing the production incentive from ₹10 to ₹15 per kg and including premium Matcha tea.
The subsequent revision of ATISIS has now provided a formal policy framework for these changes. Therefore, the measure moves beyond a budget announcement and strengthens the incentive structure available to eligible tea producers.
The maximum annual claim has also increased to ₹1 crore per unit or garden. This higher ceiling could provide greater support to larger eligible producers investing in orthodox and speciality tea production.
Matcha and Speciality Tea Get Wider Policy Support
The Assam tea subsidy boost also reflects the growing focus on value addition within the state’s tea industry. Matcha has emerged as a newer premium product from Assam, creating an additional avenue for producers seeking to diversify their output.
The Assam government highlighted the growth of orthodox tea production while presenting the 2026-27 Budget. According to the Budget announcement, orthodox tea output increased from 4.39 crore kg in 2021-22 to nearly 8 crore kg in 2025-26. That represents growth of more than 80% over the four-year period.
The government also pointed to Assam’s production of premium Matcha tea. The first batch was reportedly sold through the Guwahati Tea Auction Centre for nearly ₹3,000 per kg.
Meanwhile, a recent auction sale demonstrated the potential of speciality products. A speciality Pu’er tea cake produced by a Golaghat-based tea company fetched ₹12,000 per kg at the Guwahati Tea Auction Centre in September. The sale involved a five-kg lot.
Such sales do not represent the average price of speciality tea across Assam. However, they illustrate the premium that certain specialised products can command in organised auctions.
The revised incentive scheme consequently arrives at a time when producers are exploring products beyond conventional CTC tea. Higher production support could help eligible units manage some of the additional costs involved in processing speciality varieties.
Export Incentives Strengthen Assam Tea Market
The Assam tea subsidy boost is accompanied by a separate export incentive for premium CTC tea. The revised ATISIS introduces a ₹3 per kg incentive for exported Single Origin Assam Quality CTC Tea.
The incentive aims to offset some of the additional logistics costs faced by Assam as a landlocked state. These costs include inland transportation, container repositioning and terminal handling expenses.
Importantly, the revised notification recognises CTC tea sold through the Guwahati Tea Auction Centre as “Quality CTC Tea” for the purpose of this export incentive. This gives GTAC-linked tea a clearer role within the revised export framework.
The move could also strengthen the connection between Assam’s production base and its organised auction infrastructure. Guwahati hosts one of the world’s major CTC tea auction centres, making the recognition significant for traders and producers using the platform.
Dinesh Bihani, secretary of the Guwahati Tea Auction Buyers Association, said the recognition of GTAC auction sales could encourage greater participation in organised auctions. He also linked the measure to Assam’s export competitiveness and the position of the Guwahati auction platform.
Additionally, the revised scheme increases working-capital interest subvention from ₹15 lakh to ₹20 lakh. This provision can help eligible producers manage financing requirements associated with tea manufacturing and processing.
The government has therefore combined production incentives with financial and export-related measures. Together, these provisions create a broader support structure rather than relying on a single subsidy.
Revised ATISIS Extends Support Until 2031
The Assam tea subsidy boost comes with a longer policy horizon. The revised ATISIS has been extended until March 31, 2031, providing eligible producers with a longer period to plan investments under the scheme.
The extension matters because tea-processing investments often require significant capital and long-term planning. Machinery, processing facilities and product diversification cannot always be developed within a short policy cycle.
The earlier ATISIS framework already provided several forms of assistance. Assam’s Economic Survey 2025-26 recorded interest subvention on working capital, production subsidies for orthodox and speciality tea, support for plant and machinery, and agricultural income tax-related benefits.
The original scheme also offered a 25% subsidy on eligible plant and machinery for orthodox and speciality tea units, subject to the prescribed ceiling. It was designed to encourage a balance between orthodox and CTC production in Assam.
The revised policy builds on that approach while increasing the production subsidy and adding Matcha to the eligible speciality categories.
However, the actual benefit will depend on eligibility conditions and the ability of producers to meet the scheme’s requirements. A higher subsidy does not automatically translate into higher production or exports.
Therefore, implementation will remain important. Producers will need to make investment decisions based on market demand, production costs, processing capacity and access to organised markets.
Small Tea Growers Also Receive Tax Relief
The Assam tea subsidy boost forms part of a broader package of tea-sector measures announced in the 2026-27 Budget. Small tea growers have also received a major tax-related proposal.
The Assam government proposed raising the agricultural income tax exemption threshold for small tea growers from ₹2.5 lakh to ₹10 lakh annually. The change is intended to provide additional financial relief to smaller producers.
At the same time, the government proposed restoring agricultural income tax for larger assessees from April 1, 2026. The additional revenue, according to the Budget announcement, would be directed towards the welfare of tea garden communities.
These measures address different parts of the tea economy. Production subsidies target specific varieties and processing activities, while the tax proposal provides relief to qualifying small growers.
Moreover, the government has linked tea-sector support with welfare measures. The 2026-27 Budget also proposed assistance for improving tea garden hospitals, including infrastructure, diagnostics, medicines, medical equipment and dedicated healthcare personnel.
The combination indicates a wider policy approach toward the industry. Production, exports, taxation and worker welfare are being addressed through separate measures.
For small growers, however, access to incentives remains important. Their ability to invest in irrigation, processing, replanting and quality improvement can influence how effectively the sector responds to changing market conditions.
Assam Tea Industry Targets Higher-Value Growth
The Assam tea subsidy boost comes as the state’s tea industry faces pressure from rising production costs, changing consumer preferences and international competition. Industry representatives have previously described the sector as being at an important transition point.
The revised policy attempts to respond by supporting both traditional CTC exports and premium speciality production. This creates two parallel priorities: strengthening Assam’s established tea market while expanding higher-value categories.
Orthodox and speciality teas can offer producers opportunities to diversify their product portfolios. Matcha, meanwhile, gives Assam another premium category to develop.
Furthermore, the ₹3 per kg export incentive for eligible premium CTC tea addresses a different challenge. It recognises the additional logistics burden faced by exporters operating from a landlocked state.
The Guwahati Tea Auction Centre also gains importance under the revised framework. Recognising eligible GTAC sales for the export incentive could encourage producers and exporters to use organised auction channels.
Nevertheless, the long-term outcome will depend on market demand and production economics. Subsidies can reduce some costs, but quality, consistency, branding and access to international buyers will continue to influence Assam tea’s competitiveness.
The revised scheme therefore represents a policy push toward diversification and value addition. Its extension through 2031 also gives producers more time to plan investments and assess emerging opportunities.
Conclusion
The Assam tea subsidy boost has strengthened state support for orthodox and speciality tea production. The revised ATISIS raises the production subsidy from ₹10 to ₹15 per kg, includes Matcha tea and increases the maximum annual claim to ₹1 crore per unit or garden.
The policy also introduces a ₹3 per kg incentive for eligible exported Single Origin Assam Quality CTC Tea. Additionally, working-capital interest support has increased, while the scheme has been extended until March 31, 2031.
Alongside these measures, small tea growers have received a proposed increase in the agricultural income tax exemption threshold from ₹2.5 lakh to ₹10 lakh.
Together, the measures aim to support production, diversification, exports and investment across Assam’s tea industry. The effectiveness of the revised framework will ultimately depend on implementation and the industry’s ability to convert these incentives into sustainable growth.
FAQs
What is the Assam tea subsidy boost?
The Assam tea subsidy boost refers mainly to the increase in the production subsidy for orthodox and speciality tea from ₹10 to ₹15 per kg under the revised ATISIS framework.
What is the new subsidy for orthodox and speciality tea?
The revised Assam scheme provides a production subsidy of ₹15 per kg for eligible orthodox and speciality tea, up from ₹10 per kg.
Is Matcha tea included in Assam’s tea incentive scheme?
Yes. The revised ATISIS officially includes Matcha tea within the eligible speciality tea categories.
What export incentive has Assam introduced for premium CTC tea?
The revised scheme provides ₹3 per kg for exported Single Origin Assam Quality CTC Tea. Eligible CTC tea sold through the Guwahati Tea Auction Centre is recognised under the export incentive framework.
How long will the revised Assam tea incentive scheme remain in force?
The revised ATISIS has been extended until March 31, 2031, giving eligible producers a longer policy period for planning investments.