Assam in a stew over tea strike

India's declining thirst for tea has pushed down prices

Tea production in the Indian state of Assam has almost ground to a halt, as workers strike in an escalating dispute over annual bonuses.

Many plantations in Assam, source of half the country's tea, have locked out workers in response to complaints that bonuses are not being paid ahead of the Durga Hindu festival.

Workers have become used to receiving Durga bonuses, but employers claim that business is too bad to merit payouts.

Tea prices have dropped by almost one-fifth over the past three years, at a time when labour costs have been rising dramatically.

India, which focuses on relatively expensive, high-quality tea, has come under increasing competition from low-price producers such as Indonesia and Vietnam.

Entrenched positions

Prodded by the Assam state government, employers and workers are in talks to resolve the dispute.

"We are very alert on the situation because our economy is largely based on the tea industry," said Tarun Gogoi, chief minister of Assam.

But with employers unanimously pleading poverty, workers are in a difficult position.

"Workers are getting restless now," said M S Khandait of Assam Chah Mazdoor Sangh, the state's main union in the tea sector.