The Indian beverage industry is a very interesting one as it stands at a crossroads of development. Although it is home to approximately 30% of the world’s tea drinkers and consumes an astonishing 1.2 billion kilograms in the year 2022, yet its per capita consumption is still relatively very low to what is observed in the global market.
This interesting contradiction creates the background for a detailed analysis of changes in the Indian drink consumption. There is a clear fluctuation between the two most consumed beverages as coffee is gradually penetrating the urban markets.
The study of the data concerning the coffee and tea consumption in India presents a rather diverse picture of new trends in connection with the change of the palate and the current economic conditions influencing the selection of the beverages in this country.
Key Highlights
- It is important to note that India emerges as the largest importer of tea in the world where the country imports nearly 30% of the tea produced globally.
- The annual consumption of tea in India, specifically in the financial year 2022 was estimated to be around 1. 2 billion kilograms.
- Per capita tea consumption in India was 0.52 kg for the year 2009 and this is far below the average of the developed countries especially the United Kingdom.
- The overall volume of tea consumed in India is relatively small, but tea has become an established part of most households, with 88% of respondents stating that their household drinks tea.
- The northern and the western regions are the most involved in tea drinking with the northern states at 32% and the western region at 31%.
- Maharashtra is the biggest consumer of tea while Uttar Pradesh, Gujarat and Rajasthan are also major consumers.
- Of the three states, Chandigarh, Lakshwadeep and Punjab have the highest per capital consumption.
- Green tea and herbal infusions are consumed more often by the groups of consumers which are 25-40 years old and female ones.
- The high income earners and college educated people take the better brands of tea while those in the average income bracket take the traditional tea brands.
- The urban markets have a higher propensity to consume specialty and premium teas because of a growing middle income population and changing lifestyle.
- The consumer perception is shifting from the unpacked tea with much emphasis on the taste and strength of the liquor.
- Through production, coffee has been experiencing growth in India and is projected to produce 393000 metric tons by 2023.
- Tamil Nadu and Karnataka consume most of the coffee in the southern states.
- Out of the total, Tamil Nadu alone has got a maximum percentage of 60%.
- The consumption of coffee is more evident in the urban areas making up 73% of the total volume of coffee consumed.
- The largest number of coffee consumers is within the age bracket of 20-24 years and in the second place are those in the age bracket of 25-29 years.
- Filter coffee (kaapi) is the most typical form of coffee preparation in South India, especially in the states of Tamil Nadu and Karnataka.
- Instant coffee is consumed more frequently in the northern, eastern and western parts of the country.
- Coffees made with espresso include cappuccinos, lattes, among others; have found their way into different urban cities.
Brief history of tea and coffee introduction in India
The discovery of tea dates back 5,000 years ago in china, where the emperor known as Shen Nung found tea. But it took until the 17th century for tea to be officially presented in India by the British. In 1823, the first Indian tea from Assam was sent to England for public sale (Source: teaorigin.in).

The history of tea production in India can be traced back to the initial decades of the nineteenth century the tea industry in India was shaped from the early 1840s. Planting of tea began in Assam, Darjeeling and the Kangra valley. Today, India stands second in the global map for tea production with an annual production of 1,325.05 million kilograms in the year 2021.
Coffee was introduced to India in the late 17th century by Baba Budan, an Indian pilgrim who smuggled seven coffee beans from Yemen (Source: WikiPedia.org). He started planting the beans in the Chandragiri hills of Karnataka which set the foundation of Indian coffee industry.
In the present day, India ranks as the sixth largest producer of coffee globally and export most of its output. In the year 2021, India export reached its highest level of 256.57 million kg of coffee. The main coffee-producing regions are Karnataka, Kerala, and Tamil Nadu (Source: coffeehunter.com).
Indian coffee consumption has grown over two fold between 2000 and 2011 and is still rising at a rate of 5-6% per Annum. As per the statistics recorded in 2024, India imported over one million sixty kilograms of coffee (Source: statista.com).
Current Consumption Trends
Consumption Volume of Current statistics on tea consumption in India
India is the largest consumer of tea in the world as it consumes approximately 30% of tea that is produced globally.
According to the new data available, the consumption volume of tea in India was approximately 1.2 billion kilograms during the financial year 2022 (Source: statista.com).
This is a factor that has changed so much from the previous year’s indicating that there was a high demand for this favourite drink.
But the consumption is slightly higher than the per capita which is still very low compared to the world standards let alone the Indian standards. Data shows that in the year 2009 the annual per capita consumption of tea in India was just 0.52 kg per person (Source: teaboard.gov.in).
This is significantly lower than countries like the United Kingdom, where the average per capita consumption is around 1,000 cups per year (Source: kuvera.in).
The consumption of tea in India is also geographical split and as such, the northern and western part of the country dominates the total domestic consumption.
The northern states contribute around 32% of the total consumption, while the western region accounts for approximately 31% (Source: teaboard.gov.in).
The two regions with least consumption levels of these products are east and south.
Some of the studies, however, have found that though the per capita consumption of tea is less than that of coffee, the tea has very high usage frequency in the Indian households as 88 percent use tea. This suggests that there is still market that has not been fully tapped in order to have a higher tea-drinking rate in India.
Regional Preferences: Major Consuming States of Tea in India
The amount of tea consumed in India also differs with region since the country has unique regional aspects. According to the analysis, Maharashtra has taken the lead in becoming the highest tea consuming state contributing 14.86%of the total tea consumption of India. Uttar Pradesh came second with a 10.35% share (Source: dnaindia.com). Among tea consuming states, Gujarat and Rajasthan were also in the list of top states.
However, if one looks at the per capita consumption, the rankings change. Chandigarh stands first, Lakshadweep second, Punjab third, Gujarat fourth, and Goa fifth. This clearly shows that there is difference in the way tea is consumed in India and the various regions particular to the favoured type of tea.
The northern regions of Assam and Darjeeling are renowned for their premium quality teas, with a focus on orthodox tea production to cater to discerning domestic and international markets (Source: custommarketinsights.com).
The large-scale production of robust and malty Assam teas and the prized, delicate teas, having a unique muscatel flavour, produced at Darjeeling’s high-altitude estates are well known.
In southern region, West Bengal and Tamil Nadu are prominent tea growing states having both CTC and orthodox type of tea. The Dooars and Terai areas of West Bengal and the Nilgiri region of Tamil Nadu are key contributors to CTC production, and provide a major part of the Indian market for tea consumption, while South India tea is characterized by the floral fruity notes of Nilgiri teas.
Age, gender, and socio-economic class Tea preferences in India
Several demographic factors influence the consumption of tea in India to a varying degree. According to the Tea Board of India’s study on domestic tea consumption, younger consumers aged 25-40 years are more likely to consume green tea and yerba mate compared to older age groups (Source: teaboard.gov.in).According to a report posted in the official website of NCBI, women also tend to consume more green tea and fruit/herbal infusions than men (Source: ncbi.nlm.nih.gov).

In the socio-economic class aspect, those with higher income and higher education prefer white and red teas which are among the premium tea types. They also show a greater concern with the medical advantages of tea. On the other hand, those with average economic status are bound to perceive tea as a traditional product which is consumed daily.
The study also found that tea consumption is higher in urban areas compared to rural regions, with the northern and western states accounting for a larger share of domestic tea consumption (Source: teaboard.gov.in). This could be due to factors such as; higher population density, hence more people consuming tea outside their homes due to industrialization and urbanization in those regions.
Thus, the present data indicates that tea choices depend on demographic factors including age, gender, and income in the Indian context, which points to the importance of segmentation marketing strategies to capture different consumer groups.
Popular types of tea consumed (e.g., black tea, green tea, chai) in India
India has various types of teas that differ in the taste and their role as part of the culture of the country. Black tea is one of the most consumed tea types in India. India is one of the leading producers globally of black tea, especially from the Assam and Darjeeling regions which are known to produce quality black tea leaves.
From the statistics of the financial year 2022, the Indian population consumes tea to the nearest of about 1.2 billion kilograms, with black tea accounting for a significant portion of this demand (Source: statista. com).

Masala Chai is another type of tea that is quite popular in India. This is a tea made from boiling black tea mixed with milk and spices such as cardamom, cinnamon, and ginger or a combination of any of these spices found in India which is usually sold by hawkers. India has become so accustomed to this tea that it is now considered a separate category of tea in the global market.
Besides black tea and chai which are widely popular there is a trend toward green tea in the recent years especially among the people who are concerned about their health. Nilgiri and Kangra of India produce green teas with floral and light sweetness, and somewhat on the smooth side.
Some other types of teas consumed in India are Oolong tea, herbal tea and some traditional tea from different regions of the country such as Kashmiri Kahwa and Butter Tea. These teas represent the country’s tea-making heritage and the high regard for the subtleties of this popular drink.
Urban vs. Rural Consumption | Differences in Tea consumption patterns in India.
From the trends of tea consumption in India, it is also quite evident that the market is divided between the urban and rural sector.
India’s tea consumption is skewed towards the northern and western parts, which together account for 63% of the domestic consumption (Source: thehindu.com). In contrast the south region has a consumption of 18% and the east and northeast region which accounts for 75% of India’s annual tea production has 19% consumption.

The following are some of the reasons that can account for this disparity. Flavour and intensity of the liquor continues to be important trends with rural India slowly shifting towards packaged tea. This has led some of the packet tea players to use coloring agents because people down south prefer the dark colored teas.
On the other hand, urban India is witnessing a rise in demand for specialty and premium teas, driven by the growing middle-class population and their preference for wellness and lifestyle beverages (Source: economictimes.indiatimes.com).The other factor that affects the urban tea consumption is that teas are being consumed outside the home more often, especially in the western and the southern regions.
In fact, the Tea Board of India is developing strategies on how to increase daily per capita tea consumption that is currently a mere 700 grams among the rural as well as the urban markets.
Current coffee consumption statistics Volume of Current statistics on coffee consumption in India
According to the Coffee Board of India, the country’s coffee production reached 115,000 metric tons in 2011 (source: coffeeboard.gov.in). This figure has continued to raise, with India producing over 393,000 metric tons of coffee in 2023, the highest level in its history Source: novocapsule.com).
India is a tea-drinking country, but coffee consumption has been increasing over the years especially among the younger generation of the age of 20-40 years.
The domestic per capita coffee consumption, however, remains low compared to black tea consumption in regions other than South India (Source: coffeebi.com).
The table below shows the growth in India’s coffee consumption over the years:
Coffee Consumption in India (2000-2011)
The growth in coffee consumption has been driven by various factors, including the increasing popularity of coffee shops and cafes, the growing middle class, and the influence of Western culture (source: custommarketinsights.com). The market demand for coffee has grown tremendously and the current forecast for the value for the market for India is 25 billion Rupees for the year 2018.
Areas with highest coffee consumption in India.
Among all the states in India, Karnataka, Tamil Nadu, and Kerala consume only up to twenty five percent of coffee used in the country.
Karnataka produces the largest amount of coffee in India. Besides, 60% of its consumption comes from Tamil Nadu (Source: coffeebi.com).
Assam, Meghalaya, and Nagaland also consume coffee, but the amont is less than the southern states (Source: coffeegeography.com). Coffee shop chains and specialty coffee brands are rapidly growing in these locations, increasing the number of coffee lovers, especially among younger people (Source: levista.in).
Coffee consumption breakdown across different regions in India:

Region | Consumption Share |
Tamil Nadu | 60% |
Karnataka, Andhra Pradesh, Kerala | 25% |
Northeastern States | 1% |
Rest of India | 14% |
Drinking coffee has become quite normal, especially for the working class and the youthful population in India, coffee has also gained popularity. In fact, experts predict that the country’s coffee consumption will more than double by 2027, driven by the expansion of coffee shop chains and the growing preference for specialty coffee (Source: indifoodbev.com).
Age, gender, and socio-economic class Coffee preferences
A survey conducted by the Coffee Board of India in 2009 also categorically notes that more than 73% of the coffee consumed in India comes from urban homes. The rest of it 27% is owed to rural consumption specifically in South India. (Source: coffeeboard.gov.in).
The study indicated that there are differences in the choice of coffee depending on the age, gender and socio-economic class. The 20-24 age group comprises the largest segment of coffee consumers at 37%, followed by the 25-29 age group at 27% (Source: slideshare.net). Meanwhile, as for the gender distribution it was found that the male gender constitutes 60% of the coffee drinkers.
According to the socio economic status, the target group falls in the middle and the upper middle of the Indian population. This goes in line with the perception that coffee has evolved from the traditional ‘black liquid’ to a ‘youthful and stylish’ drink in the country.
It is also important to note that consumption of coffee is not equal across the different regions. Instant coffee is more popular than the filter coffee in northern eastern and western regions of the country, but less popular than filter coffee in southern region of the country.
Types of coffee people prefer in India (for example, filter coffee, instant coffee, espresso).
Various types of coffee are consumed in the country and therefore, there is a unique coffee culture in India. Some of the common types are filter coffee, instant coffee, and espresso.
The filter coffee or kaapi is the most popular and consumed mode of coffee in South India especially in Tamil Nadu and Karnataka. This coffee is prepared by passing water filtered through a metal sieve over the coffee leading to a strong, aromatic, slightly sweet coffee. As per the Coffee Board of India, the southern state of India has a 78% share of the total coffee consumption with Tamil Nadu and Karnataka state consuming 36% and 31% respectively.
However, instant coffee enjoys a higher consumer ship in the north, east, and west zones in the country. This type of coffee is easily accessible and takes little preparation; therefore, it appeals to the busy lives of urban consumers. The latest developments in the market have seen the coffee chain and vending machines increase in the Tier 1 and Tier 2 cities hence increasing the demand for instant coffee.
Also, there is an increasing trend of consuming espresso-based drinks, like cappuccino and latte etc., especially in the urban cities of India. These coffee styles have been introduced to the Indian market by the specialty coffee shops and the impact of international coffee brands such as coffee Starbucks. But their popularity is still low compared to the filter coffee that is consumed by a vast number of people.

In statistical analysis, today India’s coffee consumption is about 120000 tonnes per annum as compared to 5% average annual growth rate recorded since year 2000. India has been a good producer of milk and coffee and this has also helped manufacturers to offer a wide range of coffee products to Indian consumers.
Urban vs. Rural Coffee Consumption- Differences in consumption patterns
Coffee consumption in India also differs between the urban and rural population. While urban areas account for around 73% of total coffee consumption, the remaining 27% is attributed to rural areas, particularly in South India (Source: coffeebi.com).

While the occasional drinkers consume 52% of the total coffee and they are located in the regions other than the southern zone, the southern zone has a high preference for filter coffee. This therefore means that taking of coffee is predominantly a South Indian affair as compared to other parts of the country.
The domestic per capita coffee consumption is also comparatively much lower in other parts of India apart from South India as consumption of black tea overshadows it. Also, it should be pointed out that the constant presence of coffee chains and vending machines in Tier 1 and Tier 2 cities across India has led to the rise in the consumption of coffee among the urban population.
Market Trends and Future Projections–Current market growth rates for tea and coffee in India
The tea market in India is expanding at a very fast rate and it is believed that it will touch US$ 14.7 Billion by 2032 at a Compound Annual Growth Rate (Source: imarcgroup.com). This growth is driven by increasing health consciousness among consumers, leading to a surge in demand for green tea and herbal infusions (Source: custommarketinsights.com).
Besides, India is one of the largest producers and exporters of tea as a result of the favorable climate and the availability of different areas for the cultivation of various teas. Likewise, the Indian coffee market is also growing to a very large extent.

The market size was estimated to be valued at US$ 478 Million in 2022 and is predicted to reach US$ 1,227.47 Million by 2032 with a CAGR of 9% from 87% from 2023 to 2032 (Source: custommarketinsights.com). Such growth is due to the expansion of young consumers, especially in metropolitan areas, coupled with the growing middle-income people group and the modification of their lifestyle.
The availability of local and multinational coffee shops has also been of significant help in increasing the rates of coffee consumption in India.
Tea Market | Coffee Market |
Projected to reach US$ 14.7 Billion by 2032 | Projected to reach US$ 1,227.47 Million by 2032 |
CAGR of 3.18% during 2024-2032 | CAGR of 9.87% from 2023 to 2032 |
Driven by health consciousness and demand for green tea | Driven by youth demand, rising middle class, and coffee shop expansion |
Consumer Preferences Shifts in consumer preferences and trends in India
There is a growing trend of consumers seeking teas directly from gardens of origin with emphasis on single estate teas with unique flavours. All these changes are being driven mostly by the growing awareness of health issues as well as the need for green and non-animal tested products.
According to Mintel research, coffee consumption is gaining traction among 56% of Indians, particularly among younger generations, affluent classes, and residents of southern regions (Source: businessoffood.in).
As for coffee, there has been a gradual rise in the consumption of specialty coffee and the café culture amongst the youths of India. Competition has grown stiff in coffee shops and cafes segment which includes Café Coffee Day, Barista, Starbucks, and Costa Coffee among others.
The market of coffee shops has expanded to an estimated worth of 25 billion Indian Rupees in 2018 (Source: coffeebi.com).
Still, Indians consume only 30 cups of coffee per year, which is far from the global average of 200 cups, but the market is still untouched.
Challenges and Opportunities
Issues faced by the tea and coffee industry (e.g., climate change, labor issues)
There are many challenges that the tea and coffee industries in India have to deal with, including climatic conditions and union problems. Assuming the current scenario India’s tea production is expected to grow at a CAGR of 4% to 1. 40 million tons between 2020-2025 (Source: marketfeed.com). However, the changing climate, characterized by increased temperatures and decreased precipitation, is altering the suitability of land for tea cultivation (Source: hsat.space).
Indian coffee production is also referred to be vulnerable as the failures due to climate change effects may lead to a reduction of production by 50%. Arabica and robusta coffee’s ideal temperature is 18-22°C and 22-28°C respectively and this shows how they can be affected by climate change. In the marketing year 2022/2023, it was estimated that the production of arabica coffee would be 1.58 million 60-kilogram bags. Therefore, arabica was estimated at 58 million 60-kilogram bags while robusta was a figured at 4.11 million bags.
Other social concerns include low wages, poor working conditions, and restricted healthcare and social security in the tea industry (Source: halmaritea.com).
A large number of tea garden workers are paid meagre wages which does not suffice their basic requirements and hence living in a state of poor. Handling of hazardous chemicals and pesticides present some risks to the lives of the workers. To overcome these challenges, stakeholders should focus on the protection of the rights and welfare of the tea and coffee workers, sustainable production and consumption of tea and coffee, and finding solution to the effects of climate change.