Indian tea prices in the United States are scheduled to rise around Diwali, amid a high tariff: CEO of Wagh Bakri

Indian tea lovers in the United States may soon be forced to pay more against their favorite drink, as the additional definitions of Indian goods by September to October, before the holiday season. Google-based Wagri Bakri, which exports approximately 10-12 % of its annual sales of 3000 rupees to the United States, warned that the prices of Indian tea may rise sharply during the Diwali period.

This warning comes after US President Donald Trump announced a new round of customs tariffs on Indian imports on August 6, 2025. This follows a 25 % early duty imposed on August 1, linked to continuing to buy Russian crude oil between Russia – Ukraine. With the last step, most Indian goods that enter the United States are now subject to a 50 % effective tariff, the highest imposition on any American trading partner. The second round of duties will start from August 27.

American tea market

“The United States is the number one export market, followed by the Middle East, Europe and Australia,” Sanjay Cengal, CEO of Wagh Bakri Tea Group, told Hindu Busonsline. “India is the largest farm in the world for distinct black tea, and the United States does not produce tea at all. With a 50 % tariff in place, distributors cannot absorb the cost. The burden will eventually decrease on consumers, and prices in the United States will definitely rise.”

Currently, three types of Indian tea are shipped to the United States – loose tea, and special tea made in India for major American retailers such as Walmart, and packed tea marks like Wagh Bakri. All three groups are expected to feel a tariff.

In addition to uncertainty is timing. Indian exporters usually charge large shipments before the holiday season, especially Diwali in October, when the demand increases in the United States. “Many of our containers have already left Indian ports while they are at sea. These will land in the United States within two to three weeks next. Since the customs tariff was imposed after shipping, we need to see how customs that are already on the way deal.”

Impact on consumers

If the customs duties are fully implemented, the average price of Indian tea packed in the United States may see a highly slope leap. Retaires, who usually provide Indian tea products for diaspora societies in South Asia as well as an increasing base for American consumers, may have to raise prices by 15-25 %.

Nevertheless, Wagh Bakri expects to maintain 12 % growth in the American market, citing the increasing popularity of Indian tea until only Indian diaspora. “China is no longer limited to the community market. We now see the main American consumers develop a taste of black tea,” Singal said.

Trade tensions wave on the horizon

India exported the goods worth $ 87 billion to the United States last year. With Washington’s escalating tariff, exporters are afraid of multiple sectors – including textiles, food and FMCG – heavy losses. The last duties have already strained bilateral relations between the two countries.

However, there may be a glimmer of comfort. Speaking on Friday after interviewing Russian President Vladimir Putin, President Trump hinted that Washington may retract secondary sanctions on countries such as India that continues to buy Russian crude oil. “If you do a secondary penalty, it will be destroyed. If I have to do so, I will do it. Maybe I will not have to do so,” he said.