What Is the Nature of India’s Restrictions on Tea? Some Hope Emerges Among Nepali Tea Producers

Nepali tea producers, who have been facing export disruptions for nearly two months, expressed some hope following a letter received from Indian authorities on Thursday. Aditya Parajuli, president of the Nepal Tea Producers Association, stated that Indian customs officials, who previously conducted 100% sampling and testing of imported tea, have now indicated in the letter that this will be reduced to 20%. Moreover, the Nepalese government has assured efforts to promote exports to India and other third countries, encouraging producers to resume operations. Since mid-June, exports to India had ceased, causing many factories to shut down. “We will have to wait until Monday to see how these new instructions are implemented,” Parajuli added.

Nepal’s tea industry, heavily reliant on the Indian market, has faced similar export barriers in the past. “Given the risk of further issues after this disruption, we are exploring various alternatives,” said Parajuli, who is also an invited member of a government-formed task force. This task force was charged with conducting a comprehensive study of tea export challenges and submitting a report within two weeks outlining short-, medium-, and long-term recommendations. However, due to a lack of dependable alternative markets, exports outside India remain limited.

The recent obstacles stem from a Standard Operating Procedure (SOP) issued by the Indian Tea Board. The rule, announced on February 10 and effective May 1, led to the export blockade. Surendra Suvedi, executive director of the National Tea and Coffee Development Board in Nepal, explained that although the quality testing requirements have not significantly changed, procedural complications have arisen in implementation. “Testing is conducted once Nepalese tea arrives in India, and the delay in receiving reports has caused problems,” he noted.

Under the new regulations, the importer must select certain containers and take two 500-gram samples for quality testing, with results made available online within 14 days. Director Deepak Khanal of the Board explained that while provisions remain similar, the testing method and timeframe have introduced challenges. “Previously, a single test would suffice for six months, but now every shipment—whether today’s, tomorrow’s, or the previous night’s—requires testing,” he said.

Testing results are currently taking over two weeks to be released, causing goods to remain in warehouses for extended periods and increasing storage costs. Initial testing requires a fee of 15,000 rupees, with a re-test costing 24,000 rupees if samples fail. “Most Nepali teas pass due to their good quality, but the time and procedural complexities are creating difficulties for producers,” Suvedi added.

Nepal produces over 25 million kilograms of tea annually. Last year, nearly 15.6 million kilograms were exported, generating an estimated 459 crore rupees in revenue, according to the National Tea and Coffee Development Board. Of this, more than 86 to 90 percent was exported to India. Annual orthodox tea production, which is almost entirely exported to India, accounts for about 6.5 million kilograms. Suvedi stated that while this disruption is a short-term setback, it could be viewed as a long-term opportunity. “With concerted effort, new export gateways to third countries can be opened,” he said. Potential alternative markets include Pakistan, Bangladesh, China, and Western countries. Establishing domestic quality testing laboratories, auction centers, and strengthening the tea board are essential for sustainable long-term exports.