Pakistan’s foreign-exchange earnings from tea, which during the period 1951-53 averaged more than 40 million rupees annually, had fallen to an average of 6 million rupees annually during the period 1964-66. This decline in earnings resulted from the diversion of tea from export to domestic markets where higher prices reflected the extent to which the growth of domestic tea consumption had exceeded the growth of production. Recognising that continuation of this trend would lead to Pakistan becoming a net importer of tea with further loss of foreign exchange, the government took steps in the early sixties to en¬courage expansion of tea production as an alternative to restraining demand through rationing or eventual import controls. In this paper our primary concern is to establish, through analysis and forecast of market forces, the like¬lihood of Pakistan being able to maintain its self-sufficiency position in tea production up to 1975 without recourse to market controls, and to suggest policy measures that will help in achieving this objective in the longer term. An ancillary purpose is to recommend technical and economic changes that will improve the efficiency of tea production.