Tea industries shut down as India restricts Nepali tea exports

Kathmandu, June 15

Tea industries in Ilam have shut down from Monday after the Indian side created obstacles to the export of Nepali tea under various pretexts.

Tea entrepreneurs decided to close the industries after India disrupted Nepali tea exports for the past one and a half months, citing quality inspections. Business owners said they were forced to take the drastic step because the tea produced has been unable to find a market due to export restrictions, increasing the risk of the stock deteriorating in warehouses.

According to Shiva Kumar Gupta, Senior Vice-President of the Nepal Tea Producers Association, the new Standard Operating Procedure (SOP) recently introduced by India’s Tea Board has created major hurdles for Nepali tea exports.

Orthodox tea factories in the hill districts have been closed from today, while CTC tea factories in the Tarai will shut down from June 18, he said. “The Indian Tea Board has unnecessarily troubled importers of Nepali tea, causing the market for our tea to collapse,” Gupta said. “At present, no tea importer is willing to purchase tea from us.”

Indian tea importers have reportedly backed away because of the lengthy process in which samples of Nepali tea are collected at Indian customs and sent for testing, with reports taking 15 to 20 days to arrive. Gupta said Indian traders are reluctant to buy Nepali tea because even minor shortcomings identified in the test reports could lead to the destruction of the tea consignment.

“Since our tea is not selling, we have shut down the factories. What is the point of operating them? This is the core problem,” he added. According to the association, Ilam produces around 6.5 million kilograms of tea annually, while Jhapa produces about 20 million kilograms. India accounts for 90 per cent of the market for tea produced in these regions.

The Suryodaya Orthodox Tea Producers Association Nepal has already stated in a press release that around 200,000 kilograms of Nepali tea shipped to India have been held in importers’ warehouses in the name of quality testing by the Indian Tea Board. It also warned that more than one million kilograms of tea are at risk of rotting in factories due to the export blockade.

Tea entrepreneurs have complained that the government has failed to make any diplomatic efforts to facilitate exports despite the severity of the crisis. With the closure decision, 56 tea factories in the hill region and 30 CTC tea factories in the Tarai have been affected. Thousands of workers employed in the sector and farmers who supply green tea leaves have been directly impacted.

“Daily wage workers will suffer the most,” Gupta said. “We do not have the money to pay workers or farmers for their green tea leaves. If the tea is not sold, where will the money come from?” He said the government has been informed about the crisis through various channels and that tea producers remain hopeful that diplomatic initiatives will be undertaken soon to resolve the issue.

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