What is a tea processing and packaging project report?
A tea processing and packaging project report is a detailed project report (DPR) for a unit that blends and packs tea. The unit buys made tea, sifts, cleans and blends it, then packs it as branded packet tea. It sets out the process, machinery, tea buying, market, project cost, means of finance, five-year projections, DSCR and break-even that a bank needs.
Entrepreneurs, tea traders and existing packers use it to size the unit and apply for a term loan or PMEGP; lenders use it to judge repayment capacity.
Also known as: tea blending and packaging project report, tea packaging unit project report, packet tea business plan, tea packing business DPR.
What a bank checks in a tea packaging project
A tea packing unit adds value through blending, packing and distribution, so its margin sits in a narrow band. Lenders test these four numbers first; the values are the ones used in our sample report.
Made tea is most of the cost. A report that shows a much lower share is usually pricing tea below what the auctions are paying.
Laminated pouches, cartons and jars cost more than power and fuel in a packet tea unit. Small packs push this share up.
Debt service coverage ratio is cash available for loan repayment divided by the repayment due. The sample's lowest year is 1.23, so there is little room for error.
Distributors and kirana wholesalers expect credit. With 30 days of tea stock on top, this drives the working capital limit.
Values are the assumptions in our illustrative sample. Your report uses figures for your capacity, suppliers and market.
Tea processing and packaging plant cost in India
Cost depends on daily packing volume, how far packing is automated and whether you own the shed. The large tier is the unit in our sample report; the other two are indicative ranges.
Small unit
₹20–45 lakh
About 100–300 kg per day, one packing machine
- Machinery₹8–18 lakh
- Shed fit-out (rented)₹4–10 lakh
- Working capital margin₹5–12 lakh
Fits PMEGP, subject to limits
Mid-size unit
₹75–150 lakh
About 400–700 kg per day
- Machinery₹35–60 lakh
- Land and building₹25–60 lakh
- Working capital margin₹12–25 lakh
MSME term loan with cash credit
Large unit
₹217 lakh
1,100 kg per day, 3,30,000 kg per year
- Plant and machinery₹101.82 lakh
- Building and civil works₹56.43 lakh
- Working capital margin₹19.58 lakh
Term loan ₹163 lakh (75%), promoter ₹54 lakh
Small and mid-size ranges are indicative and exclude land unless stated. Costs vary with location, pack formats and machine make.
Tea processing and packaging manufacturing process
A packing unit does not make tea from green leaf. It buys made tea and turns several grades into one consistent blend, in six steps.
- Buying and tasting
A taster samples lots at auction or from gardens and buys grades that fit the blend recipe and target price.
- Sifting
Vibro sifters and fibre extractors take out fibre, stalk and oversize particles, so the blend looks even in the pack.
- Cleaning
Magnetic separators remove iron filings and a destoner removes stones and grit; FSSAI caps iron filings at 125 mg per kg.
- Blending
Grades from different regions are mixed in a blending drum in fixed ratios to hold liquor colour, strength and taste.
- Quality check
Each batch is cup-tested against the standard blend and checked for moisture before it goes to the packing line.
- Packing
Tea is filled by weight into laminated pouches, cartons, jars or bulk bags, then batch-coded and sealed.
Buying tea: raw materials for a packing unit
Most packet tea for milk tea is built on CTC grades, bought at public auctions or direct from gardens. Packers usually hold about a month of stock and buy from more than one region, so a poor crop in one area does not break the blend.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| CTC tea from auctions and gardens | 94% | 364.11 |
| Flavours and consumables | 6% | 23.24 |
| Total | 100% | 387.35 |
Packing material is costed separately in the sample report (8.5% of sales).
Machinery for tea blending and packing
The packing line is the largest machinery cost. The other equipment is simple, but it decides how clean and even the blend is.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Tea sifter and fibre extractor | Removes fibre, stalk and oversize leaf | 15.28 |
| Blending drum | Mixes grades evenly in batches | 15.27 |
| Magnetic separator | Pulls out iron particles | 5.09 |
| Automatic pouch and carton packing machines | Weigh, fill and seal retail packs | 45.82 |
| Weighing scales and conveyors | Move and check-weigh tea and packs | 10.18 |
| Quality testing kit | Cup testing and moisture checks | 10.18 |
| Total plant and machinery | 101.82 | |
Costs are the sample report's estimates for a 1,100 kg per day unit. Get current quotations before you finalise.
Market and tea prices for a packing unit
Packet tea competes on a taste that suits local water and habits, on freshness and on the margin left for the dealer. Regional packers win where they know the local cup better than national brands, and many also pack under private label.
Buying prices move. Tea Board data shows the all-India average auction price at ₹215.93 per kg in May 2026, against ₹188.64 per kg in May 2025. North India averaged ₹251.07 per kg and South India ₹123.36 per kg in the same month (provisional figures).
- Tea distributors and wholesale dealers
- Kirana and general stores
- Supermarkets and private-label retail chains
- Tea stalls, canteens and hotels
- Offices, hospitals and institutional buyers
Where a new packer wins: the gap between North and South Indian auction prices gives room to design blends for a price point. The sample report sells at ₹279 per kg ex-factory, before GST.
Licences for a tea blending and packaging unit
Beyond Udyam, GST and state approvals, tea packing has its own registrations. Rules as checked in October 2026:
| Tea Board registration | Under the Tea (Marketing) Control Order, 2003, producers of packet tea, tea bags and flavoured tea count as manufacturers and must register with the Tea Board (Form A) |
|---|---|
| Flavoured tea | Separate Tea Board registration before marketing flavoured tea; natural flavours must come from physical processes only |
| FSSAI licence and standard | Tea must meet FSSAI standard 2.10.1, for example total ash 4.0–8.0%, water extract at least 32% and crude fibre at most 16.5% |
| Legal Metrology | Registration as a packer under rule 27 of the Legal Metrology (Packaged Commodities) Rules, 2011, with the declarations printed on each pack |
| Tea waste licence | Needed to hold, sell or export tea waste under the Tea Waste (Control) Order, 1959; check whether your sifting rejects fall under it |
| GST | Tea, whether or not flavoured, under heading 0902 is taxed at 5% (Schedule I, entry 34, from the September 2025 rate notification) |
Loans and schemes for a tea packaging unit
PMEGP
Manufacturing projects up to ₹50 lakhMargin-money subsidy of 15–35% of project cost for new units. Suits a small packing unit on a rented shed.
MSME term loan and cash credit
Mid-size and large unitsTerm loan for machinery and building, plus a cash credit limit for tea stock and dealer credit. Our sample funds 75% by loan.
Tea Board packaging unit scheme
50% assistance, up to ₹10 croreOnly for companies with average turnover of ₹25 crore or more and at least 80 tonnes of packets a month. Not for a first unit.
Scheme terms change. Confirm current limits with the bank, the Tea Board or the scheme portal before applying.
Mistakes that weaken a tea packaging project report
- Costing tea at one old auction price
The all-India average rose from ₹188.64 to ₹215.93 per kg in a year. Test the blend cost at higher prices, or DSCR looks safer than it is.
- Leaving out sifting rejects
Fibre, stalk and dust taken out in sifting cannot go into the pack. Saleable output must be lower than tea bought.
- Under-costing packing
Small pouches and cartons cost more per kg of tea. In the sample, packing is 8.5% of sales, more than three times power and fuel.
- Skipping Tea Board registration
Many new packers assume only gardens register. Packet tea producers are manufacturers under the 2003 order, and lenders may ask for the certificate.
How NPCS helps you set up a tea packaging unit
- Capacity and pack mixSize daily output and choose pouch, carton and bulk formats for your market.
- Blend costingWork out tea cost per kg from auction and garden prices, with sifting loss.
- Bank-ready project reportProjections, DSCR and working capital in the format your lender wants.
- Licences and layoutTea Board, FSSAI and Legal Metrology checklist, plus the plant layout.
NPCS has prepared project reports since 1994, and its client list includes 2 assignments on tea blending and packaging.
What's inside the tea processing and packaging sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
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Tea Processing and Packaging project report: frequently asked questions
How much does it cost to start a tea processing and packaging unit?
A small unit packing 100–300 kg a day needs roughly ₹20–45 lakh, and a 400–700 kg per day unit about ₹75–150 lakh. Our sample report models a 1,100 kg per day unit at ₹217 lakh, including land, building and working capital margin. These are indicative figures; your project report works out the cost for your capacity, pack sizes and location.
Do I need a Tea Board licence to blend and pack tea?
Yes, in most cases. The Tea (Marketing) Control Order, 2003 treats anyone producing packet tea, tea bags or flavoured tea as a manufacturer, and a manufacturer must register with the Tea Board. Flavoured tea also needs Tea Board registration before it is marketed. You also need an FSSAI licence and Legal Metrology registration as a packer.
Which machines are needed for tea blending and packing?
You need a vibro sifter and fibre extractor, a magnetic separator and destoner, and a blending drum. The packing side needs an automatic pouch or carton machine, weighing scales, conveyors and a small testing kit. In our sample report the packing machines are the biggest item at ₹45.82 lakh out of ₹101.82 lakh.
Is a tea packaging business profitable?
It can be, but margins are thin. In our illustrative sample the unit earns ₹30.64 lakh net profit on ₹644.49 lakh of sales in Year 3, with average DSCR of 1.41 and break-even at 51% of capacity. Profit depends on buying tea well at auction, holding blend quality, packing cost and dealer credit.
Can I get a PMEGP loan for a tea packaging unit?
Yes, if the project fits the scheme. PMEGP covers manufacturing projects up to ₹50 lakh, with a margin-money subsidy of 15–35% of project cost depending on category and location. That suits a small packing unit. Larger units usually take an MSME term loan with a cash credit limit, and every lender needs a project report with DSCR.
Is tea processing the same as tea blending and packaging?
Not quite. A tea processing factory turns green leaf from gardens into made tea by withering, rolling, oxidising and drying. A blending and packaging unit buys that made tea and sifts, cleans, blends and packs it. This page and our sample report cover the blending and packing unit, which is the common choice for a new entrepreneur.
Tea packaging business kaise shuru kare?
Start by choosing your market and blend style, usually CTC for milk tea. Register the business and get FSSAI, Tea Board and Legal Metrology registrations. Find a shed, buy a sifter, blender and packing machine, and line up auction or garden suppliers. A project report with costs and projections helps you raise a bank or PMEGP loan.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report; its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, location and loan scheme.
Sources and references
- Tea (Marketing) Control Order, 2003Tea Board of India (Gazette of India), checked Oct 2026
- Revised guidelines for registration as a manufacturer of flavoured teaTea Board of India, checked Oct 2026
- Guidelines for obtaining licences (tea waste, warehouse, manufacturer registration)Tea Board of India, checked Oct 2026
- Food product standards, chapter 2.10: beverages (tea), version 3, 7 May 2025Food Safety and Standards Authority of India, checked Oct 2026
- Monthly auction prices of tea, 2025 and 2025-26Tea Board of India, checked Oct 2026
- Tea Development and Promotion Scheme 2024-25 to 2025-26: packaging unitsTea Board of India, checked Oct 2026
- Notification No. 9/2025-Integrated Tax (Rate), 17 September 2025Central Board of Indirect Taxes and Customs, checked Oct 2026
- Certificate of registration of packers under rule 27, Legal Metrology (Packaged Commodities) Rules, 2011Department of Consumer Affairs, Government of India, checked Oct 2026
- Prime Minister Employment Generation Programme (PMEGP)MSME Department, Government of Uttar Pradesh, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.