Tea is more than just a drink in India; it’s a part of our culture and daily life. Whether you’re on the bustling streets of Mumbai or in the calm countryside of Assam, chances are that tea is a daily ritual. India is the second-largest producer of tea in the world, and beyond being a cherished beverage, tea is also a fantastic business opportunity.

If you’ve been thinking about starting a tea shop, you’re on the right path. Let’s explore this detailed guide to help you start your tea business in India.

Why Start a Tea Business in India?

• Large Consumer Base: With over 1.3 billion people, India has a massive tea-drinking population. Around 88% of Indian households consume tea daily (Source: Statista).

• Growing Industry: The Indian tea industry is expected to grow at a CAGR of 6.5% from 2021 to 2026.

• Lower Investment Needs: Compared to other food and beverage businesses, opening a tea shop requires less initial investment.

• Market Value: The India Tea Market was valued at USD 11,702.3 million in 2024 and is projected to reach USD 17,934.1 million by 2033, growing at a CAGR of 4.19% between 2024 – 2033.

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Step-by-Step Guide to Starting a Tea Business

1. Market Research

• Target Audience: Decide whether you want to cater to office-goers, students, or the general public.

• Tea Preferences: Some regions love strong masala chai, while others prefer green tea or iced tea.

• Competition Check: Identify existing tea stalls or cafés nearby and plan how to stand out.

2. Choose Your Tea Shop Type

• Small Tea Kiosk: Roadside setup with chai, biscuits, and snacks (low investment).

• Tea Café: Premium setup offering a variety of teas, snacks, and a cozy ambiance.

• Tea Pavilion: Quick-serve model suitable for malls, bus stations, or airports.

3. Create a Business Plan

• Investment:

  • Tea Kiosk – ₹50,000 onwards

  • Tea Café – ₹5 lakhs to ₹10 lakhs

• Location: High-traffic areas like offices, colleges, malls, or IT parks.

• Menu:

  • Start simple with classic chai, masala chai, ginger tea, and a few snacks.

  • Cafés can expand to green teas, iced teas, and sandwiches.

• Suppliers: Source tea leaves from trusted suppliers in Assam and Darjeeling.

• Franchise Option: Many tea franchises offer setup, training, and marketing support in exchange for royalty fees.

4. Legal and Licensing Requirements

• FSSAI License – For food safety compliance.

• GST Registration – Mandatory for businesses with annual turnover above ₹40 lakhs.

• Shop & Establishment License – Local permit to operate.

• Fire Safety Certificate – Needed for cafés or larger outlets.

• NOC from Local Authorities – May be required in some states.

5. Location and Setup

Best locations for tea outlets:

• Bus stops and road stations

• IT parks and office complexes

• Shopping malls

• Busy market streets

• Metro stations

Note: If you opt for a franchise model, the franchisor usually helps with site selection based on footfall and competition.

6. Profitability of a Tea Business

• Tea Kiosk: ₹3,000 – ₹5,000 per day (₹90,000 – ₹1.5 lakhs per month).

• Tea Café: ₹10,000 – ₹20,000 per day (₹3 lakhs – ₹6 lakhs per month).

Hiring Staff

• Small Kiosk: 1 assistant is usually enough.

• Café: Requires waiters, cooks, and cleaning staff.

• Franchise Model: The franchisor may assist with recruitment.

Marketing Your Tea Shop

• Offline Marketing: Flyers, posters, and attractive shop signage.

• Social Media Marketing: Create business pages on Instagram, Facebook, and Google My Business. Share pictures of your teas, snacks, and café ambiance.

Final Note

If starting a tea business in India feels overwhelming, platforms like FranchiseBhoomi can help. They connect aspiring entrepreneurs with top tea franchise opportunities across India. Whether you want to run a small tea stall or a full-fledged café, you’ll find the right guidance and resources to kickstart your journey.