New Indian regulation halts Nepali tea exports, impacting industry significantly

Jhapa – The Indian Tea Board’s new regulation requiring mandatory laboratory testing for each truck of tea imports has completely halted Nepali tea exports for the past two weeks.

Business owners say this policy tightening by India has put Nepal’s tea industry, which earns five to six billion rupees in foreign currency annually, in a major crisis.

According to Aditya Parajuli, president of the Nepal Tea Producers Association, India issued a new Standard Operating Procedure (SOP) effective from Baisakh 18. The new provisions have added administrative and financial burdens for Nepali exporters.

“This is the peak season for tea exports. Currently, about 500,000 kilograms of tea are ready for export,” said Parajuli. “However, due to India’s new and stringent provisions, no business owner has dared to send tea to India. Not a single packet of tea has been exported in the past two weeks.”

Previously, once a Nepali tea producer passed a laboratory test, they could send up to 10 truckloads of tea to India within 15 days based on that certificate. But under the new rule, as soon as a truck enters the Indian border at the Kakarbhitta checkpoint, a sample from each truck must be sent to an Indian government-approved laboratory for mandatory testing.

A fee of 18,000 rupees per truck is required for sample testing, and it takes at least 14 days for the report to be issued. The Indian laboratory will upload the report online within 14 days, and if the test fails, the tea will be confiscated and cannot be sold in the Indian market or sent to other countries.

“On one hand, the rule of expensive fees and time-consuming testing for each truck creates a complete obstruction to exports,” added Parajuli. “On the other hand, the provision to confiscate the tea if the report is unfavorable means that if this rule is not amended, the door for Nepali tea exports to India will be permanently closed.”

India has remained the main market for Nepali tea. Business owners complain that there are no adequate parking facilities or infrastructure at the Panitanki customs to safely hold loaded trucks for 10 to 14 days until the laboratory report arrives.

The Nepal Tea Producers Association demands that the government immediately initiate government-to-government (G2G) dialogue with the Indian side to remove this non-tariff barrier in the tea sector. The association has indicated that efforts are underway for this.

CTC and orthodox teas produced in Nepal are considered popular for their quality in the global market. However, policy barriers in the primary market, India, have put the livelihoods of farmers, large industrialists, and the millions of workers dependent on this sector in jeopardy.

According to the National Tea and Coffee Development Board, in the fiscal year 2081/82, tea plantations spread over 20,602 hectares produced 26,123,111 kilograms of processed tea. In the fiscal year 2081/82, tea worth 4.59 billion rupees was exported from Nepal.

There are 170 large tea plantations and 120 small and medium-sized tea gardens across the country. More than 15,000 small farmers are directly involved in tea production. Around 100,000 workers are directly employed from the plantations to the industries.