Ilam, June 14: Nepal’s tea industry, which earns more than Rs 4 billion in foreign exchange annually, faces a major crisis after India imposed stricter import checks on Nepali tea. Tea processors in Ilam have announced they will shut down their factories from June 15 if the restrictions are not lifted.
The move follows new procedures introduced by India's Tea Board on May 1, requiring mandatory quality testing for every shipment of Nepali tea. Industry representatives say the rules have effectively blocked exports during the peak first flush season, when the highest quality and most valuable tea is produced.
According to the Suryodaya Orthodox Tea Producers Association Nepal, which represents 53 factories, more than 300,000 kilograms of Nepali tea are stranded in India awaiting test results, while another 700,000 kilograms are piled up in domestic warehouses.
Lack of conservation area for rare tea plant
Association chairman Dilli Shrestha said storage facilities have reached capacity. Factories continue purchasing green tea leaves from farmers but cannot sell processed tea, leaving operators with mounting losses.
Under the new Indian rules, laboratory reports can take more than 20 days to arrive. Tea cannot be sold until clearance is granted. If a sample fails, exporters must either destroy the shipment or bring it back. A second test requires additional fees and several more weeks of waiting.
Industry leaders say the restrictions amount to a non-tariff barrier aimed at limiting Nepali tea sales in India. They argue that shipments are allowed through customs but are later held up in Kolkata warehouses for lengthy testing.
Tea entrepreneurs had sought diplomatic intervention from Nepal's government in late May. Although India's Tea Board briefly issued a notice suggesting Nepali tea could be sold in the Indian domestic market, it later clarified that the original restrictions remained in force.
"We no longer know where to sell our tea," said tea producer Gopal Kattel, warning that Nepal risks losing a market worth billions of rupees if the issue is not resolved quickly.
The factory shutdown threat could hit thousands of tea farmers who depend on selling fresh green leaves. Suryodaya Municipality alone has nearly 3,000 tea farmers cultivating more than 33,000 ropanis of tea plantations.
The municipality has urged Nepal's Foreign Ministry to launch high level diplomatic talks with India, warning that prolonged restrictions could cripple the tea sector, cost thousands of jobs and damage the national economy.
According to the National Tea and Coffee Development Board, Nepal exports over 7 million kilograms of orthodox tea annually, with more than 90 percent going to India. The country also exports CTC tea, much of it to the Indian market. Total annual tea exports are valued at around Rs 4.25 billion.
