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Published by: Amity Research Centers
Published in: 2022

Abstract

In 2022, the Sri Lankan tea industry was severely affected by an economic crisis with production falling to the lowest level since 1999. Tea export was the biggest foreign exchange earner for the country, accounting for USD1.3 billion annually and 5% of global tea production. Sri Lanka's descent into darkness was viewed as part of a culmination of the consistent pursuit of poor economics in a populist policymaking environment with a focus on shifting the country's agriculture to fully organic, and decision-making without caring for consequences. The crisis resulted in a gap in the export market, providing an opportunity for India, the world's second-largest producer of tea, to expand its global market share. However, many experts believed that the orthodox tea production was not a lucrative business for India due to its higher cost of production and that replacement of the Sri Lankan supply shortage might be short-lived. Will India be able to fill the void in tea supply left by the Sri Lankan tea industry and capitalise on the opportunity that opened up as a result?

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Time period

The events covered by this case took place in 2022.

Geographical setting

Region:
Asia
Countries:
Sri Lanka; India

About

Abstract

In 2022, the Sri Lankan tea industry was severely affected by an economic crisis with production falling to the lowest level since 1999. Tea export was the biggest foreign exchange earner for the country, accounting for USD1.3 billion annually and 5% of global tea production. Sri Lanka's descent into darkness was viewed as part of a culmination of the consistent pursuit of poor economics in a populist policymaking environment with a focus on shifting the country's agriculture to fully organic, and decision-making without caring for consequences. The crisis resulted in a gap in the export market, providing an opportunity for India, the world's second-largest producer of tea, to expand its global market share. However, many experts believed that the orthodox tea production was not a lucrative business for India due to its higher cost of production and that replacement of the Sri Lankan supply shortage might be short-lived. Will India be able to fill the void in tea supply left by the Sri Lankan tea industry and capitalise on the opportunity that opened up as a result?

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 2022.

Geographical setting

Region:
Asia
Countries:
Sri Lanka; India

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