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TERI SAS launches M.Sc. (Energy Studies & Management)
Vulnerability of tea industry in India to climate change: an assessment of impacts of climatic variations on tea production and trade

Student name: Ms Aashna Arora
Guide: Dr Arabinda Mishra
Year of completion: 2015
Host Organisation: TERI University
Abstract: Taking production of, and export by, the Indian tea industry as a representative case, this thesis explores various dimensions of trade and environment linkages. In particular, it captures the two sources of vulnerability that the tea crop faces i.e. uncertainties in production and increased pests due to climatic change and the trade barrier that arises due to environment regulations on the Maximum residue limit (MRL) of pesticides. Climate change on the one hand is increasing pest instances on the tea crop, thereby forcing a rise in pesticides used while MRL regulations restrict this usage due to limits imposed by the importing countries. Hence the producer, in the light of this two way pressure, has to use various adaptation measures in order to cope up. Thus, this study aims to study these vulnerabilities and its impact on tea output, exports and producers adaptation decisions. This has been established through Case Studies on tea plantations in different parts of India. It has verified the extent of these impacts and examined the optimal decision taken by the producer to deal with the cost of complying with both. The results show that plantations who could afford to incur high costs are complying with regulations and continuing to export. On the other hand, plantations who find it difficult to adapt costly measures are shifting to other markets or domestic consumers. Further, a time series regression analysis has been done for the time period 1980-2013 using key tea production parameters along with climate variables, pesticides used and MRL regulations. Agricultural production function has been used in the first model quantifying the impacts of climate change on tea yield and the results show variations among different states. The second model evaluates the impact of regulations on exports and the results indicate a higher impact in North India than South India. Also, a linkage has been drawn between these results and the case studies. Keywords- Tea output, Tea exports, Climate Change, MRL regulations, Case studies, North & South India, Time Series Regression Analysis.