ILAM, July 6: Nepal's tea industry, which supports thousands of jobs and earns billions of rupees in foreign exchange, continues to face uncertainty. Poor government support for quality improvement and recurring export barriers imposed by India have disrupted the sector for years. The problem usually peaks during the main harvest season, when tea leaves are at their best.
The same dispute resurfaced this year. During the first flush, the most valuable harvest of the year, India delayed imports of Nepal's processed tea for nearly two months. The Indian Tea Board introduced a Standard Operating Procedure, or SOP, requiring quality tests on every shipment before it could be sold. Since more than 90 percent of Nepal's processed orthodox tea is exported to India, the rule hit exporters hard.
The situation has eased slightly over the past two weeks.
"Our tea is moving into the Indian market again, but we still cannot be sure when another restriction will appear," said tea entrepreneur Gopal Kattel.
Both Nepal and India are now in the peak tea season. Nepali producers say Indian authorities tighten restrictions every year to protect their domestic market.
"Indian businesses and the Tea Board often create hurdles when production is at its highest," said a tea producer. "Our government has failed to secure long term market access through government to government agreements. The impact reaches everyone, from the national economy to tea farmers and workers."
As in previous years, the latest restrictions forced many factories to shut down. Fifty three factories under the Suryodaya Orthodox Tea Producers Association remained closed from June 15 to 24, while another 46 factories shut from June 18 to 24. The factories have now reopened, but owners say they closed them to protest the government's failure to secure stable export arrangements.
Factory closures hurt not only owners but also thousands of farmers, workers and transport operators. Farmers who rely entirely on tea are among the worst affected.
The Indian Tea Board introduced the SOP on May 1, 2026. Under the new rules, every truck carrying Nepali tea had to undergo quality testing. Exporters had to wait more than 20 days for the results and could not sell the tea during that period. If a shipment failed the test, it had to be destroyed or returned. A failed shipment also required another test after more than three weeks, with exporters paying the testing fee again.
Following the restrictions, tea entrepreneurs met officials from the Prime Minister's Office and the Ministry of Foreign Affairs on May 10, asking them to resolve the issue through diplomatic channels.
On May 19, the Indian Tea Board issued another notice saying Nepali tea could be sold in India's domestic market. Some exporters resumed sales. Later, however, the board said that notice was not official and again enforced the stricter May 1 rules.
Before May 1, exporters only needed one sample test to ship up to 20 truckloads of tea. Producers say India had created hurdles before, but never imposed measures that could force already exported tea to be destroyed.
"This is the most serious problem we have faced," said Kattel, who is also general secretary of the association. "The quality testing appears to be an excuse to stop Nepali tea from reaching Indian consumers."
Exporters say trucks are allowed through customs but are then held in India for weeks in the name of quality checks. They argue that the government must do more to protect industries that process local agricultural products.
"Our tea is made from locally grown leaves, yet we still don't know where we can reliably sell it," Kattel said. "Repeated attempts have been made to block our processed tea, forcing factories to close from time to time."
Lack of conservation area for rare tea plant
He said successive governments have ignored repeated calls to solve export problems.
"The government must take diplomatic initiatives and work toward government to government agreements for a lasting solution," he said.
A few years ago, Indian lawmakers even proposed imposing a 40 percent tariff on Nepali tea, claiming it was of poor quality. Around 30 lawmakers submitted the proposal to both houses of Parliament.
Exporters have received some relief after India reduced the testing fee per truck from more than Rs 11,000 to Rs 2,000. However, they say the overall testing process remains unchanged.
"We cannot depend only on India," Kattel said. "Nepal must also secure long-term markets in other countries."
Rs 4.25 billion worth of processed tea exported
According to the National Tea and Coffee Development Board, Nepal exports processed tea worth about Rs 4.25 billion every year. More than seven million kilograms of orthodox tea are exported annually, with over 90 percent going to India. The rest is shipped to countries including the United States, the Netherlands and Germany.
Orthodox tea is mainly produced in Ilam, Panchthar and Dhankuta. Nepal also produces around 19 million kilograms of CTC tea every year, of which about 10 million kilograms are sold in India. Jhapa is the country's largest producer of CTC tea.
The board says Nepal has 108 large tea estates and processing factories. Ilam has 16 large factories, while Jhapa has 69 and Dhankuta has six. Ilam has the highest number of tea farmers, but Jhapa produces the most tea. Tea is the main source of income for 70 percent of farmers in Jhapa and 64 percent in Ilam.
Lack of internationally recognised laboratory
Tea producers say Nepal urgently needs an internationally recognised laboratory to end recurring export disputes and strengthen the global reputation of Nepali tea. Without one, exporters must rely on costly foreign laboratories to certify quality.
"If Nepal had a recognised laboratory whose reports were accepted internationally, the tea sector would benefit greatly," said tea entrepreneur Uday Chapagain. "The lack of facilities to certify organic tea and test quality has become a major problem for both farmers and processors."
Organic certification is currently provided by foreign agencies, including Ceres and IMO. Producers say the certificates must be renewed every year, making the process expensive and time consuming.
The government has introduced the "Nepal Tea, Quality from the Himalayas" brand through the National Tea and Coffee Development Board, but producers say it has had little impact.
Although the government has talked about a government to government agreement with China to promote tea exports, no such deal has materialised. As a result, Nepal remains heavily dependent on India, leaving exporters exposed whenever India imposes restrictions.
Chapagain believes China offers huge market potential, but says the government must remove export barriers.
"If China opens its market to Nepali tea, the industry's future will improve," he said.
Exporting to China is not simple. According to Chapagain, Nepali tea must meet at least four requirements. It must be registered with China's General Administration of Customs, supported by a government to government agreement, accompanied by a health certificate, and promoted through business visits.
"Only the government can complete these tasks," he said. "Trade agreements alone are not enough. The government must also create a smooth export system. At the same time, tea quality must remain high."
Although Nepali producers have held talks with Chinese buyers in the past, exports have failed to take off because the two governments have not signed the necessary agreements. Only small quantities reach China through informal channels.
No incentives, no laboratory
Organic orthodox tea has strong demand in international markets, but producers say the government has done little to support the sector. More than 15 years after organic tea production began expanding, farmers and processors still face the same challenges.
They say the government has yet to recognise the value of organic tea. Despite repeated requests, agriculture and the tea industry have never received the attention they deserve.
Nepal does not even have a reliable laboratory to confirm whether tea is organic. Farmers and exporters spend thousands of rupees each year obtaining certification from foreign laboratories.
Nepali organic tea is exported to more than 18 countries and commands premium prices. Demand from overseas buyers often exceeds supply, but producers say they cannot expand production without government support.
Tea producer and technician Sharad Subba said he regularly receives orders that he cannot fulfil.
"Buyers from third countries ask for large quantities of speciality tea, but we simply don't have enough," he said. "Production can increase every year if the government supports farmers. Higher quality starts with supporting tea growers."
He said years of requests for support have gone unanswered.
Subba believes organic production is the key to securing the future of Nepal's tea industry.
"The government does not even have data on how much organic tea Nepal produces," he said. "It treats organic and conventional tea as the same. Farmers are discouraged because billions are spent on chemical fertilisers while organic farming receives little attention."
The government previously provided exporters with a cash incentive equal to five percent of earnings from processed tea exports to third countries, but producers say stronger and more consistent support is needed.
Farmers face same struggles
Tea farmers say government neglect has pushed the sector deeper into crisis.
Mukunda Acharya, a farmer from Suryodaya Municipality, said producers have repeatedly urged successive governments to help expand exports beyond India.
"India is our only major market for processed tea," he said. "Farmers and factory owners have travelled to Kathmandu many times asking the government to help us reach other countries, but nothing has changed."
He said the biggest burden falls on farmers.
"Many families survive by selling green tea leaves, but earning a decent living remains difficult," he said.
Farmer Dambar Katwal said India creates new obstacles almost every year.
"India keeps finding excuses to block Nepali tea," he said. "We raise the issue, but the government pays little attention. It also does nothing to encourage better quality production."
He believes Nepal must expand exports to Europe and other international markets to reduce dependence on India.
Tea entrepreneur Punam Rai said India has repeatedly imposed unofficial restrictions on Nepali tea.
"Sometimes the border is blocked, sometimes new conditions are introduced," he said. "The real victims are farmers."
He said the latest incident, where tea was cleared through customs but later prevented from being sold after reaching Kolkata, reflected the same pattern.
Acting Mayor of Suryodaya Municipality Durga Kumar Baral said Indian authorities entered importers' warehouses in Kolkata to collect samples from every sack of Nepali tea, making the process lengthy and costly.
He warned that holding tea in warehouses under the pretext of quality testing could reduce its quality and cause heavy losses.
"Without a long-term solution, Nepal's tea industry will suffer," Baral said. "Thousands of farmers and workers could lose their livelihoods, and the national economy will also be affected. The government must ensure uninterrupted access for Nepali tea to export markets."
