Unlocking the shackles of tea export

Nepali tea exporters have found a measure of relief following weeks of disruption in their trade with India. A new arrangement allowing sample testing of 20 percent of total consignments has eased previous hurdles, which had mandated testing for all exports in Indian food laboratories.

Tea cultivation in Nepal dates back to the 1860s, initially encouraged in Ilam district with saplings from India's Darjeeling. Today, tea is a significant agricultural product, providing direct employment to around 40,000 people and indirect jobs for thousands more. Plantation has expanded beyond Ilam to districts in Koshi, Bagmati, and Lumbini provinces, making tea a vital source of income for many farmers.

India remains the primary market for Nepali tea, absorbing approximately 87 percent of total exports in FY 2024-25, valued at Rs4.2 billion. Processed black tea goes to India, while green tea is exported to the EU, US, and East Asian countries. Preferential trade agreements between Nepal and India generally allow duty-free access for agricultural products.

However, Nepali exporters frequently encounter non-tariff barriers, including stringent standards, quality tests, and certifications imposed by India. While framed as necessary measures for quarantine and food safety, these barriers are often perceived as protectionist tactics to shield domestic products from foreign competition. This "hide-and-seek game" of non-tariff barriers significantly complicates export processes for Nepali agricultural goods.