Tea in our country is a part of our culture. No matter which part of the country you are from, tea is a habit. India is the second largest tea producer in the world. This is where tea becomes a great business idea. If you have ever thought about starting a tea shop, you would be lucky. If you want to make that idea a reality, there are some things you need to know. Let’s read more about them.
Why start a tea business in India?
There are many practical reasons to start a tea business in India, let’s look at some of them:
- Reason 1: With a population of over 1.3 billion, India has a very high number of tea drinkers. About 88% of Indian households consume tea daily.
- Reason 2: The Indian tea industry is expected to grow at a compound annual growth rate (CAGR) of 6.5% from 2021 to 2026.
- Reason 3: Compared to other food and beverage businesses, starting a tea shop requires less investment.
- Reason 4: The Indian tea market was valued at US$ 11,702.3 million in 2024 and is expected to reach US$ 17,934.1 million by 2033.
Steps to Starting a Tea Business in India
Market Research
Before setting up your tea shop, it is important to understand the market you are entering. Who are your target customers, office workers, students, general public, etc.?
- What types of tea are popular? In some regions, people prefer strong spicy tea, while in others, green tea or iced tea is the trend.
- Are there other tea shops or stores nearby? How can you differentiate yourself?
These are all questions that you should ask and understand as part of your market research.
Choose your tea shop type
There are different types of tea businesses you can do in India depending on your budget and goals:
- Small tea shop: A classic roadside tea shop that serves tea, biscuits, and snacks. This is a low-investment option.
- Tea cafe: A more premium setup that offers a variety of teas, snacks, and a cozy atmosphere.
- Tea kiosk: Ideal for malls, railway stations, or airports. This is a quick-service model.
Make a business plan
You should have a detailed plan for your business.
- Own your own shop
Investment: A basic tea shop can cost anywhere from ₹50,000 to ₹1,00,000, while a cafe may require ₹5 lakh to ₹10 lakh.
Location: Choose an area with high footfall, such as offices, colleges, or public spaces. For a cafe, a trendy shopping area or a corporate park might work best.
Menu: Start simple. Your menu could include classic teas, spiced teas, ginger teas, and perhaps a few snack options. In a cafe, you could serve green tea, iced tea, and sandwiches.
Suppliers: Look for local suppliers for your tea leaves. Quality is important, so choose suppliers from tea-producing states like Assam or Darjeeling.
2. Franchise Business Model
A tea franchise business requires an upfront franchise fee, a royalty fee, and a certain percentage of monthly sales. The initial investment may include shop setup, training, and operational support. In return, you will benefit from the brand’s reputation and established customer base.
Legal and Licensing Requirements
To start a tea business in India, you need to meet several legal requirements:
FSSAI License: This ensures that your tea shop complies with food safety standards.
GST Registration: Mandatory for businesses with an annual turnover of more than ₹40 lakh.
Shop and Establishment License: A local license from the municipal corporation to operate your shop.
Fire Safety Certificate: Essential if you are opening a cafe or a large tea shop.
NOC from the local government: Required in some states to ensure that your tea shop does not violate any local regulations.
Location and Setup
For any business, especially tea shops and cafes, location is crucial. For tea shops, locations near busy places like bus stops, railway stations or office complexes are ideal. For tea shops, premium locations like shopping malls, high streets or corporate hubs will attract more people.
Locations to Consider:
- Bus Stops
- Railway Stations
- IT Parks / Office Complexes
- Shopping Malls
- High Streets
- Corporate Hubs / Metro Stations
If you are opting for a tea shop franchise, the franchisor helps in selecting the location based on footfall and competitive analysis.
Profitability of a Tea Business in India
Let's see how much you can earn from your tea shop
Tea shop: A small tea shop can generate a daily income of ₹3,000 to ₹5,000. That is ₹90,000 to ₹1.5 lakh per month.
Tea cafe: A well-located cafe can generate a daily income of ₹10,000 to ₹20,000. That is ₹3 lakh to ₹6 lakh per month.
Tea is not just a drink, it is a business opportunity. With the right planning, location and strategy, you can turn your tea shop into a profitable venture. Remember, franchises are here to make your journey easier. You can also start your own shop with a small investment. We often do not see the opportunities in front of us and the same is true with tea. Although we use it every day, no one knows the business opportunity behind it.
