In many Eurasian languages, chai or cha is the word for tea. This comes from the Persian چای chay, which originated from the Chinese word for tea 茶 chá. (The English word "tea", though, comes from the Hokkien Chinese tê.) In English, this spiced tea is commonly referred to as masala chai or simply chai, though the term refers to tea in general in the original language. Numerous United States coffee houses use the term chai latte or chai tea latte for their version to indicate that the steamed milk, much like a regular caffè latte, is mixed with a spiced tea concentrate instead of espresso. By 1994, the term had gained currency on the U.S. coffeehouse scene.
Tea plants have grown wild in the Assam region since antiquity, but historically, Indians viewed tea as a herbal medicine rather than as a recreational beverage. Some of the chai masala spice mixtures, or karha, that are still in current use are derived from Ayurvedic texts.
In the 1830s, the British East India Company became concerned about the Chinese monopoly on tea, which constituted most of its trade and supported the enormous consumption of tea in Great Britain around one pound (by weight) per person per year. British colonists had recently noticed the existence of the Assamese tea plants, and began to cultivate tea plantations locally. In 1870, over 90% of the tea consumed in Great Britain was still of Chinese origin, but by 1900, this had dropped to 10%, largely replaced by tea grown in British India (50%) and British Ceylon (33%), present day Sri Lanka.
However, consumption of black tea within India remained low until the promotional campaign by the (British-owned) Indian Tea Association in the early 20th century, which encouraged factories, mines, and textile mills to provide tea breaks for their workers. It also supported many independent chai wallahs throughout the growing railway system.
The official promotion of tea was as served in the English mode, with small added amounts of milk and sugar. The Indian Tea Association initially disapproved of independent vendors' tendency to add spices and greatly increase the proportions of milk and sugar, thus reducing their usage (and thus purchase) of tea leaves per liquid volume. However, masala chai in its present form has now firmly established itself as a popular beverage.