Nilgiri tea is generally described as being a dark, intensely aromatic, fragrant and flavoured tea grown in the southern portion of the Western Ghats mountains of Southern India. It is grown in the hills of the Nilgiris district of Tamil Nadu, though there are numerous other tea-growing districts in South India as well, including Munnar and Central Travancore, further south in Kerala state.
Nilgiri tea plantations are represented by the Nilgiri Planters' Association, which is an organizational member of the United Planters Association of South India (UPASI), headquartered in Coonoor. UPASI is the peak body representing plantation owners in South India. However, plantations only account for around 30% of tea production in Nilgiri District. The vast majority of production is undertaken by small growers, who typically own less than one hectare each. The majority of Nilgiri tea small growers are the Badagas, a local community of agriculturists.
Tea plantations in Nilgiri District (as in other growing districts of India) typically own and operate their own processing factories. Small growers sell their tea as green leaf to "bought leaf factories", which are independently owned. (Although in recent years, some plantation factories have started buying green leaf from small growers) After processing (which converts the green leaf into 'made tea'), most is sold through regularly scheduled auctions in Coonoor, Coimbatore and Kochi. More than 50% of Nilgiri tea is exported, and usually finds its way into blends used for tea bags. Data is unreliable on the precise proportion of Nilgiri tea that is actually exported. However, Neilson and Pritchard (op cit) suggest that at least 70% of South Indian tea is exported, and the Nilgiris constitutes more than half of all South Indian production.
The expensive hand-sorted, full-leaf versions of the tea like the Orange Pekoe (O.P.) are highly sought after at international auctions making it unaffordable for most locals. In November 2006 a Nilgiri Tea achieved "Top Honours" and fetched a world record price of $600 per kg. This was at the first ever tea auction held in Las Vegas. A machine-sorted, lower-cost variety of high quality tea is a semi-full leaf variety known as Broken Orange Pekoe (BOP). However, most production occurs via the Crush, Tear, Curl or CTC process of manufacture, which delivers a higher number of cups per measure (technically known as cuppage). The strong flavours of Nilgiri tea make it useful for blending purposes. At the same time, Nilgiri tea has suffered from poor reputation associated with its erstwhile reliance on sales to the former USSR. Soviet buyers had little regard for quality. In the 1990s the collapse of this trading partner triggered a substantial economic downslide in the Nilgiris district, which was further aggravated by various quality issues. In recent years the Tea Board of India has charged some producers of Nilgiri tea with fraudulently adulterating their product, and has closed some Bought Leaf Factories due to non-compliance with food safety regulations. Also with a view to improving product quality, the United Planters Association of South India and the Tea Board of India have instigated programs to change cultivation and harvest practices among small growers.