Nepali tea exports to India halted again due to new testing rules

Thousands of small tea farmers in eastern Nepal are facing severe financial difficulties due to ongoing policy and technical barriers imposed by Indian authorities on the export of Nepali processed tea. The complex quality testing process introduced by the Indian Tea Board has once again completely halted the export of processed tea to India.

Recently, exports had resumed for a few days after Indian authorities agreed to conduct ‘random sampling’ instead of testing each vehicle. However, exports have been stalled again due to a new requirement for sample collection and testing from each bag at the warehouses of importers in Kolkata.

The laboratory reports for the collected samples take weeks to arrive, and until the reports are available, the tea cannot be sold. This impractical arrangement has left millions of kilos of processed tea stranded in Indian and Nepali warehouses. Repeated non-tariff barriers have filled the storage capacities of Nepali tea industries, and with unsold tea, industrialists are unable to pay farmers for green leaves.

The halt in exports during the peak tea-picking season has brought several tea industries in Jhapa and Ilam to the brink of closure, with tea leaves in the plantations at risk of spoiling. This situation threatens the primary income source of hardworking small farmers.

The Federation of Nepalese Chambers of Commerce and Industry and local municipalities have urged the government to prioritize this sensitive issue. Stakeholders in the tea sector have called on the federal government to initiate high-level diplomatic and policy efforts with the Indian government to protect the billions-worth international market established by Nepali tea and to prevent thousands of dependent farmers and workers from facing starvation.

Aditya Parajuli, president of the Nepal Tea Producers Association, stated that the government has promised to advance the process of establishing an international-standard laboratory in Nepal to resolve the recurring technical and quality-related issues in Nepali tea exports. He shared that this was discussed in a nearly two-hour special meeting at the Ministry of Foreign Affairs, which included representatives from the Tea Producers Association, Deputy Leader of the Parliamentary Party Ganesh Parajuli, and the Foreign Minister.

The crisis in Nepali tea exports, caused by the directives and stringent standards issued by the Indian Tea Board on February 10, has prompted concrete initiatives at the state level. During the discussions at the ministry, government officials mentioned that it could take 5 to 7 years to establish a laboratory meeting international standards. However, considering the sensitivity of the tea sector and the recurring problems, Foreign Minister Shishir Khanal and the parliamentary team have instructed officials to develop a plan to complete the construction within a year.

They have directed the secretary to immediately present a detailed report on the feasibility and cost of operating the lab within a year, given the national prestige and trade implications involved. The initial estimate for establishing an international-standard lab is between 200 to 250 million rupees. Participants in the discussion emphasized the need to demonstrate the political will to complete the work within a year, as the amount is not significant for the state.

To alleviate the difficulties faced by Nepali products due to India’s stringent policies, the Nepali embassy and the ministry have been engaged in continuous diplomatic dialogue with Indian counterparts, with secretarial-level officials assigned to the task, raising expectations of a positive outcome soon. In the past, governments have not shown interest in building a laboratory to overcome export barriers under the guise of testing.

Meanwhile, the main government body responsible for measuring the quality of food products, the Department of Food Technology and Quality Control, has been moved from the Ministry of Agriculture to the Ministry of Health under a recent government decision. Officials involved see this structural change as an opportune moment to improve lab management for agricultural products like tea, in line with international standards.

Deepak Khanal, director of the National Tea and Coffee Development Board, noted that while the long-term solution for Nepali tea lies in organic production and its international certification, foreign markets currently do not accept it as ‘by default’ organic. Given the different lab tests and standards required by countries like India and China, the main challenge and necessity for the Nepal government is to establish its own reliable mechanism to fully certify the quality of Nepali products.