For many decades, India was the most important tea producing and exporting country in the world. In the late 1960s, however, she was replaced by Ceylon as the world's largest exporter of tea. But that was not all. While in the past, along with jute manufactures, tea had been one of the two main sources of foreign exchange for India, its importance diminished rapidly during the period under study. The contribution of tea to the country's total export earnings dropped sharply from 19.1 per cent in 1960/61 to 9.5 per cent in 1970/71. This chapter is devoted to an analysis of these striking developments in the export performance of the Indian tea industry.

Table 5.1 which outlines the changes in the value and volume of exports, from 1960 to 1970, reveals that exports of tea attained a peak level in 1963, and, except for some fluctuations, registered a downward trend thereafter. Over the decade as a whole, the average annual quantity of tea exported fell from 203.7 million kg in the three-year period 1960–1962 to 192.4 million kg during 1968–1970. As compared to the marked decline in export earnings, this fall of 5 per cent or so was relatively mild. The average annual value of exports fell by a little more than 25 per cent, from $257.9 million in 1960–1962 to $192.6 million in 1968–1970. This wide disparity between trends in volume and value can be explained in terms of the steadily falling average unit value of tea exports.