Adding milk or cream to tea is a common practice in a number of cultures, especially in Western tea culture, but also in India and some other countries. Usually, milk is only added to black tea, but people occasionally add milk to other types of tea or herbal tea as well.

When milk is added to tea, the character of the tea changes dramatically. Milk contains a fair amount of natural sugars (a fluid ounce of whole milk contains about 1.6g of sugar), so adding milk will naturally sweeten a tea slightly, even if you do not add any additional sweetener.

The tea also binds to tannins in the tea, compounds responsible for bitter flavour, astringent mouthfeel, and a dark colour. Adding even a small amount of milk tends to drastically reduce the bitterness and astringency in a cup of tea, which is one of the reasons people add it.

The reduction of bitterness and astringency probably contributes to the sensation of sweetness more than the sugar itself.

Source: Rate Tea