How to Start a Tea Business in India?

Are you a tea lover, thinking of turning your passion into a business? In India, chai is more than simply a beverage; it's a comforting, conversation starter, and sometimes even a reason to take a break from the hectic pace of life. What if I told you that you could make money from this small passion of yours? It is not only possible to start a tea business in India, but it may also be quite fulfilling on a personal and financial level. This article will walk you through a comprehensive guide, whether you dream to run a small tea cafe or sell tea online.

Why Start a Tea Business in India?

You must be wondering why you should consider a tea business even though there are several tea shop owners. Well, the tea business may seem like a very common and small business, but it is surely not the case.

India's tea market, which was valued at USD 11.50 billion in 2024, is expected to grow at a compound annual growth rate (CAGR) of 3.10% from 2025 to 2033, reaching USD 15.0 billion. An ideal environment for prospective tea entrepreneurs is India, a country with a strong tea culture. Tea is more than just a beverage here; it's a way of life, from the busy streets with their recognizable chai sellers to the chic cafes serving artisanal blends. But like any business, the tea industry demands careful planning, smart execution, and a thorough grasp of the market to succeed.

Also Read: How to Start a Banana Farming Business?

Here’s why you should consider a tea business in India:

Massive and Consistent Demand

In India, tea is ingrained in both daily life and culture. For millions of people, chai is the preferred beverage for everything from bedtime to social engagements in the evening. Since more than 80% of India's tea production is consumed, there is a consistent, innate demand for tea throughout the nation. There is always a tea market, regardless of where you are—in a busy metropolis or a tiny country.

Low Barrier to Entry

The fact that beginning a tea business doesn't demand a large initial investment is one of its main benefits. With a roadside stand or an internet tea business, you can begin small and grow over time. With the variety of business models available—tea cafes, retail, wholesale, internet, or private labeling—you can select the one that best fits your market, skill level, and budget.

Profitable Margin

Tea has a significant profit margin, particularly when it is offered in fancy packaging or by the cup. Depending on the locality, a cup of tea that costs ₹3 to ₹5 to produce can easily sell for ₹10 to ₹30. The profit margins for bottled tea, particularly flavored or organic types, can reach even greater levels, between 50 and 70 percent. Because of this, even on a lesser scale, the business is quite profitable.

Growing Popularity of Health and Specialty Teas

Consumers today are more concerned about their health than ever. Green tea, herbal tea, detox mixes, immunity boosters, and flavored teas are all in high demand. These goods are particularly appealing to younger, urban consumers, and they give business owners the chance to develop distinctive, branded tea-drinking experiences.

Also Read: Regenerative Farming: A Business Plan

Types of Tea Businesses You Can Start

The tea industry provides a variety of business structures, each with unique benefits and financial requirements:

• Tea Stall/Chai ki Dukaan: The most popular and least expensive arrangement. It focuses on providing freshly made chai, frequently accompanied by small snacks. Great for places with lots of foot traffic.
• Tea Cafe/Lounge: Provides a more premium experience with a greater selection of teas (such as iced teas and unique blends), gourmet food, and a cozy setting. It requires more money to be spent on equipment and decor.
• Packaged Tea Brand: Tea leaf procurement, mixing, packaging, and marketing under your own brand are all part of the packaged tea brand. Capable of serving both online and offline wholesale or retail clients.
• Online tea stores (e-commerce): These businesses use websites or e-commerce platforms to offer packaged teas directly to customers. Lower costs than at a physical store.
• Tea Franchise: Purchasing a franchise for a well-known tea brand (such as MBA Chaiwala or Yewale Amruttulya). It entails franchise fees but provides operational help, brand recognition, and a tested company plan.
• Tea Blending & Wholesale: Focusing on producing distinctive tea blends and delivering them to cafes, eateries, lodging facilities, and other merchants. It calls for a robust supply chain and knowledge of tea mixing techniques.

A Step-by-Step Guide to Starting Your Tea Business

What Do You Know About the Market?

Know Who Your Target Audience Is: Who are you serving? Are they tea enthusiasts, office workers, students, or health-conscious people? Your product selections, pricing, and marketing tactics will be determined by their choices.
Analyze the competition: Examine the current tea companies in the region of your choice. What are their advantages and disadvantages? How can you differentiate yourself from the competition? This could be a special theme, a distinctive blend, outstanding service, or environmentally friendly sourcing.

Pick Your Tea Business Style

Pay attention to new developments such as direct-to-consumer (D2C) business models, ready-to-drink (RTD) teas, herbal infusions, and organic teas.

You can consider these styles:

• A Tea Cafe or a Tea Stall

Traditional Indian tea stalls are always in style. Starting a little roadside business or going more modern with a sit-down tea cafe are both options.
Ideal for: People who want to be physically present and enjoy connecting with consumers.

• Packaged Tea Brand (Private Label)

Purchase tea from producers, package it under your own name, and market it online or in physical stores.
Ideal for: Long-term-focused entrepreneurs with branding concepts.

Also Read: How to Start a Food Cart Business in India?

• Tea Store Online

Create an online store or sell on Flipkart or Amazon. An excellent choice if you like to reach more people and keep expenses down.
Ideal for: People who are tech-savvy and enjoy online shopping.

• Tea Wholesaling or Exporting

Purchase in bulk to sell abroad or supply other tea dealers.
Ideal for: Those interested in logistics or those with strong business-to-business ties.

Plan Your Tea Business

Let's make a basic plan now that you have a business idea. Nothing fancy, just the essentials:

• What do you sell? (Tea combinations, packets, or cups?)
• Where do you sell? (online, in-store, cafe, or stall?)
• Who are you trying to reach?
• What is the initial cost?
• How are you going to advertise it?

There's no need for a 50-page document. Just make sure that your plan is sufficiently explicit to help you navigate the setup process.

Legal Stuff and Requirements

Here’s what you’ll need:

• FSSAI License: Mandatory for any food-related business.
• GST Registration: If your turnover goes above ₹40 lakhs.
• Business Registration: You can register a corporation (LLP or Pvt Ltd) or begin as a sole proprietor.
• Trademark: If you're creating a brand, think about securing your name or emblem.

You can perform all of this online or with the assistance of a legal service provider or certified public accountant.

Find a Tea Supplier

Good tea is your hero, whether you're launching an online business or a coffee shop.

Tea can be obtained from:

• Assam, Darjeeling, and Nilgiris tea farms
• Wholesale marketplaces such as Guwahati or Siliguri
• B2B websites such as TradeIndia and IndiaMART

Request samples, taste various grades, and evaluate costs. Choose the best quality within your price range rather than the lowest.

Packaging & Branding

When selling tea in a box, appearance is nearly as important as flavor.

Here is what to focus on:

• Eco-friendly and visually appealing packaging
• Proper labeling (benefits, brewing instructions, and ingredients)
• A distinctive brand name and logo

Pro tip: Inside the box, include a personal touch, such as a remark about tea or brewing tips. People adore those small surprises!

Set Up Your Offline or Online Store

For physical shops/stalls:

• Seek out populated areas (markets, office buildings, institutions, etc.).
• Verify that it is clean, has a sufficient supply of water, and is easily visible.

For online stores:

• Create a basic website using Shopify, WordPress + WooCommerce, or another platform.
• Promote your tea on Zomato, Flipkart, and Amazon.
• Use WhatsApp and Instagram to connect with direct buyers.
• Even a one-page landing page with a payment gateway and some nice images may do miracles!

Market Like a Pro

You may transform your firm from a silent one to a loud one through marketing.

Start with:

• Instagram Reels or Stories showing your tea being brewed
• WhatsApp broadcast groups for deals in your area
• If you own a physical store, use Google My Business to increase foot traffic.
• Work with food bloggers or influencers.
• Make festive or seasonal blends (such as "Summer Detox" or "Winter Chai").

Bonus Advice: Give new clients tiny, complimentary samples.

How Much Investment Is Needed?

Here’s a rough idea based on different tea business types:

Tea Stall

• Setup & equipment: ₹40,000 – ₹60,000
• Raw material: ₹10,000 – ₹15,000
• Misc: ₹5,000
• Total: ₹60,000 – ₹80,000

Packaged Tea Business (Online or Offline)

• Tea stock: ₹50,000 – ₹1,00,000
• Packaging & branding: ₹30,000 – ₹50,000
• Website & marketing: ₹20,000 – ₹30,000
• Licenses: ₹5,000 – ₹10,000
• Total: ₹1.2 – ₹2 lakh

 Tea Cafe

• Rent & interiors: ₹1 – ₹2 lakh
• Equipment & furniture: ₹80,000 – ₹1 lakh
• Staff & stock: ₹50,000 – ₹70,000
• Total: ₹2.5 – ₹4 lakh

Wrapping Up

It's not hard to start a tea business in India. It's a combination of careful preparation, fine tea, and a little marketing magic. Now is a fantastic moment to transform your love of tea into a successful business, regardless of whether you're just starting with a stand or have aspirations of launching your own tea brand.