India's tea producers are reporting record production and a jump in exports after a nine-year slump caused by weak domestic demand and increased international competition, an industry body said Saturday.

"The Indian tea industry (is) beginning to look up, with overseas demand on the increase, mainly due to very good quality teas produced by us," said Dhiraj Kakaty, a senior Indian Tea Association official in Assam state.

"The overall mood is vibrant."

The northeastern state of Assam, which is wracked by bloody insurgencies, accounts for over half of the tea production in India, the world's biggest producer, followed by China.

India's 1.5-billion-dollar tea industry has been in a slump since 1998 with prices and exports plummeting.

But last year it produced a record 955 million kilograms (2.1 billion pounds), 27 million kilograms more than in 2005, Kakaty said. Exports went up by about 8 million kilograms to 200 million kilograms.

Now, weekly auction prices are on the rise as well. Prices for good-quality Assam tea last week hit 73 rupees a kilogram after languishing below 65 rupees last year.

Global demand for tea from India improved after the industry worked hard to reposition itself as a top-quality provider, Kakaty said.

"We are getting more overseas enquiries and that in itself is an encouraging trend," the official said.

"There is no glut in the market now, unlike in previous years."

Countries such as Pakistan, Egypt, Iran and Iraq figure prominently in the export list and the tea body set up a marketing bureau in Tehran in March as part of an aggressive campaign to boost sales of the beverage there.

India's domestic tea consumption -- stagnant for over a decade -- also shot up from 620 million kilograms three years ago to 805 million kilograms last year, after aggressive marketing by the industry.

The slump in prices and exports was largely attributed to cheap but inferior teas produced by new tea-growing countries, and stiff competition in the global market.

As many as 70 of Assam's 800-plus tea gardens have closed down, unable to sell their produce with exports dropping and domestic consumption stagnant.

Faced with crashing prices, a glut in the market and falling exports, the Indian government last year announced a whopping 50-billion-rupee (1.1 billion dollars) package to help the industry replant and boost quality.