Reviving The Potential Underperformer

Tea, one of the most competitive products and potential exports of Nepal, has remained an underperformer for the past several decades. While the government and its agencies have remained mostly indifferent to the plight of developing markets abroad, according to tea entrepreneurs, the private sector has also failed in its strategic planning to diversify markets and make access to sophisticated markets for high-end premium products. 

As a result, Nepal's exports are massively concentrated on India. Nepal exported 11.74 million kg of tea of various types in the 11 months of the current fiscal year 2025/26, and 11 million kg of it was exported to the Indian markets alone, according to the statistics published by the Department of Customs. The rest of about three dozen countries, including Russia, China, Australia, Canada, Germany, France, the Czech Republic, Hungary, Iraq, Japan, Korea, Switzerland, the USA, the United Kingdom, and the United Arab Emirates – contributed only 740 kg. These exports drew Rs. 3.51 billion to Nepal. 

Udaya Chapagain, director of Gorkha Tea Estate and former president of the Himalayan Orthodox Tea Producers Association (HOTPA), said that the country currently produces 27 million kg of CTC, and 6.5 million to 7 million kg is orthodox, bringing the total tea production at about 33.5 million kg.

In FY 2024/25 and FY 2023/24, Nepal exported about 14 million kg of tea each year, with massive concentration to India. "As producers, we have failed to identify, develop and utilise the markets for our tea. Nepali farmers are doomed to sell their high-quality products at a lower rate," said Chapagain. 

Markets with extremely high potentials are in the vicinity. While China is the undisputed largest tea consumer in the world, there is high tea consumption in dry countries like Pakistan and Bangladesh. 

Nepal also has potential to export other top consumers like Turkey, Russia and the United Kingdom. Chapagain said that for Nepal, China is, probably, the best market since it also offers better prices compared to the South Asian nations. 

Entrepreneurs, including the orthodox tea producers, had been long lobbying the government to facilitate Nepali tea to China and promoting the product there, but there has been no progress so far. "The government and bureaucracy are not supportive in this initiative. We have submitted suggestions and demands in written form to the government via the HOTPA, but it was well-ignored," said Chapagain.

 Proven quality

In 2022, Nepal won six gold medals at the Second World Black Tea Quality Evaluation Competition organised in China. The winners from Nepal were Tinjur Tea Farmer Cooperative Society, Gorkha Tea Estate, Farmer Tea Processing Industry, Himalayan Shangrila Tea Producers, Siddha Devi Tea Estate and Kanchanjunga Organic Orthodox Tea Industry. But Nepal failed to use the achievement as an opportunity to expand exports to China and elsewhere. 

This failure from the government has helped to create the crisis situation, like export obstruction to India, as the Tea Board of India implemented mandatory testing of all products instead of samples to be eligible to enter its markets. Nepali tea was long stranded in ports and warehouses while the delayed certification resulted in an increased cost of trade, making Nepali tea less competitive. 

According to Chapagain, government here is mostly reactive and is activated when there is a crisis and takes an indifferent stance when the problem is solved. There have been no long-term initiatives or no development of strategies to position Nepali tea in the international markets. "Chinese tea-lovers have liked Nepali tea. We have found that they like speciality in tea as well", he said. "The government should execute economic diplomacy immediately to help us export high-end tea to China."

He also said that similar initiatives should be launched in Pakistan, Bangladesh, Turkey and in major European markets. His personal initiatives have helped to find markets for Nepal-made tea in European countries; if the entrepreneurs get even a small amount of support in promoting their products in those sophisticated markets, it can directly contribute to the farmers' income, entrepreneurs' profits, employment and national economy. Nepali entrepreneurs also initiated the 'Nepal Tea' trademark to implement collective branding and marketing, but since it was coldly received by the government and diplomatic missions, progress is not encouraging. 

Support to the farmers

Chapagain said that the tea promotion at the domestic front should begin with financial and technical support to the tea-producing farmers who are the foundation of the industry. According to him, Nepal should immediately provide subsidies on inputs and technology and subsidised loans to the tea farmers.  It is necessary to enhance their capacity and maintain the expected quality in the product. The Uttaranchal state of India followed a similar strategy, and now it has surpassed Darjeeling, the historical base of quality tea in India, in tea production. 

Gorkha Tea Estate has trained and supported more than 350 farmer families in producing quality organic tea. The company invests about Rs. 4 million in maintaining the quality to obtain and sustain the organic certification from the international regulatory bodies. It is certified by five quality organisations in Asia, Europe and America. 

The second step is to upgrade the Department of Food Technology and Quality Control (DFTQC). Despite an agreement between Nepal and India to upgrade the laboratory at the DFTQC, progress couldn't be made. Obtaining international/global accreditation for the DFTQC could solve half of the problems since the products certified by the domestic lab could be accepted by the international markets and regulatory bodies. Recent export glitches could also have been resolved had the country had an internationally accredited lab. 

Getting organic certification is also equally important for markets like Europe and Japan, said Chapagain, who exports about 40 tonnes of high-end organic tea under the 'Sundarpani' brand to countries like Germany. 

Tea evolution in Nepal

It's been 163 years since the first tea plant was planted in Nepal. Now commercial tea plantations are spread across about 21,000 hectares in 32 districts, with the eastern region becoming a leader in the production of both CTC and orthodox tea. When the then Prime Minister Jung Bahadur Rana brought tea seeds from China in 1863, he ordered his son-in-law, Governor of Ilam Gajraj Singh Thapa, to plant the seeds in Ilam, thus creating the first tea estate in the country – the Ilam Tea Estate. 

The period coincides with the launching of tea production in Darjeeling, across the border in India, where the climate was similar to that of Ilam. Tea connoisseurs say that the taste and flavour of the tea from Ilam and Darjeeling are identical. 

With the dawn of democracy in 1951, the first privately owned Budhkaran Tea Garden was established in the Jhapa district, while the government instituted Nepal Tea Development Corporation (NTDC), a profit-oriented business company, in 1966. For several decades, Nepal lacked a tea processing plant, and green tea leaves had to be sold to the factories in Darjeeling. The first processing plant in Nepal was established only in 1978. During the 1978-1988 decade, NTDC launched several programmes to encourage small farmers to engage in tea cultivation, which ultimately established the tea industry as a profitable enterprise, according to the National Tea and Coffee Development Board (NTCD). 

In 1982, the government declared Jhapa, Dhankuta, Terhathum, Panchthar and Ilam tea zones. While the tea plantation area in Nepal has dropped to 21,000 ha in 2023/24 from about 29,000 ha in 2018/19, production has gone up to 27 million kg from 25.20 million kg.   

Published in The Rising Nepal daily's Friday Supplement on 17 July 2026.