- India’s stricter import rules and mandatory lab testing have disrupted Nepali tea exports, leading to massive stock surpluses and factory closures.
- Approximately 70,000 workers and 15,000 farmers face income loss as major tea associations initiate phased shutdowns of financially unsustainable processing units.
- Nepal's heavy reliance on India as its primary buyer exposes the industry to significant risks from foreign policy changes and technical trade barriers.
- Industry leaders and the government are seeking diplomatic solutions, including mutual recognition of testing certificates, to resolve the export crisis.
Kathmandu, Nepal: Nepal’s tea industry is going through one of its most difficult periods in recent years, as stricter import rules and technical requirements imposed by India have disrupted exports and pushed several tea factories in eastern Nepal toward closure.
In key tea-producing districts such as Ilam, Jhapa, Panchthar, and Dhankuta, processing factories are struggling to keep operations running. Large quantities of processed tea are now sitting in warehouses after shipments were stopped or delayed at the border, leaving exporters without income during the peak production season.
Faced with growing losses, major tea associations—including the Suryodaya Orthodox Tea Producers Association Nepal and the Tea Alliance of Nepal—have begun announcing phased shutdowns of factories. Many units are expected to halt operations from early June (Asar), as continuing production has become financially unsustainable.
“We Cannot Sell What We Produce”
Tea entrepreneurs say the situation has left them stuck. While farmers continue to harvest fresh leaves, there is little demand from factories that are already burdened with unsold stock.
The main concern, according to exporters, is India’s revised Standard Operating Procedure (SOP) for tea imports, which now requires mandatory laboratory testing for every shipment. While the rules are intended to ensure quality, Nepali exporters say the process has become slow, uncertain, and expensive.
Even small technical issues, they say, can lead to delays or rejection of entire consignments—creating a level of risk that many businesses can no longer afford.
Farmers and Workers Feel the Pressure First
The impact is being felt far beyond factory owners. Tea farmers, seasonal workers, and transporters are all seeing their incomes shrink.
Around 70,000 workers and 15,000 farmers are estimated to be directly or indirectly affected. In many villages, farmers say they are unable to sell their green tea leaves at fair prices, while factory workers face delayed wages and reduced working hours.
“For many of us, tea is the only source of income,” said a farmer from Ilam. “If the factory stops buying, we have nowhere else to go.”
Heavy Dependence on a Single Market
Nepal produces about 26 million kilograms of tea each year, with most of it coming from eastern hill districts. Although Nepali Orthodox tea has built a strong reputation in international niche markets, India remains the main buyer.
Experts say this heavy dependence has now become a weakness. Any policy change or technical barrier in India immediately affects thousands of Nepali livelihoods.
Government and Diplomatic Efforts Ongoing
The Ministry of Foreign Affairs says discussions with Indian authorities are ongoing through diplomatic channels, including embassies in Kathmandu and New Delhi. Officials say efforts are being made to resolve the issue through dialogue.
However, industry leaders believe the response needs to be faster and more decisive, warning that continued delays could cause irreversible damage to the sector.
Calls for Urgent Relief and Reform
Exporters have urged the government to step in with immediate support measures, including diplomatic negotiations, easier testing arrangements, and financial relief for affected farmers and industries.
They are also pushing for a long-term solution, such as mutual recognition of testing certificates between Nepal and India, which could reduce repeated inspections and delays.
A Warning for Rural Economies
In tea-growing regions, the crisis is already visible in everyday life. With factories slowing down, incomes are falling, and uncertainty is growing in households that depend entirely on tea production.
Analysts warn that if the situation continues, it could lead not only to temporary job losses but also long-term damage to one of Nepal’s most important rural industries.
For now, the future of thousands of families who depend on tea remains uncertain—caught between production in Nepal and policy decisions beyond its borders.
