More than 50 orthodox tea factories in Nepal suspended operations from Monday, 15 June 2025, after India's mandatory per-consignment quality-testing regime disrupted the export of one of Nepal's most critical agricultural commodities. CTC tea producers have separately announced a factory shutdown beginning Wednesday, compounding what industry bodies describe as a near-total halt to tea exports.

What Triggered the Shutdown

The immediate cause is a Standard Operating Procedure (SOP) introduced by the Tea Board of India on 1 May 2025, which made quality testing compulsory for every single consignment of tea imported from Nepal. Previously, Indian authorities tested only selected samples, and a passing result cleared the entire shipment for sale.

Under the new system, test reports take more than two weeks to arrive — and in many cases, reportedly stretch to months. Tea cannot be sold until the report is issued, and consignments that fail must either be destroyed or returned to Nepal, imposing significant financial losses on exporters.

Scale of the Crisis

The numbers illustrate the severity of the disruption. According to industry representatives, roughly 300,000 kilogrammes of processed tea are currently stranded in warehouses in Kolkata, while more than one million kilogrammes remain unsold in factories across Nepal. Nepal typically exports around 6–7 million kilogrammes of orthodox tea to India each season, making the Indian market indispensable.

More than 90 per cent of Nepal's orthodox tea is exported to India, and around 60 per cent of its CTC tea production is sold in the Indian market, according to associations representing tea factory owners.

What Industry Leaders Said

Dilaram Shrestha, President of the Suryodaya Orthodox Tea Producers' Association, confirmed that all 53 factories affiliated with his organisation have closed. 'Starting Monday, we have shut down our factories,' he said. 'Large quantities of processed tea destined for the Indian market have remained unsold. Test samples are being collected, but reports are often delayed for months. As a result, tea entrepreneurs and factories have been severely affected.'

The association also issued an apology to tea farmers and stakeholders for disruptions to tea processing and green-leaf procurement activities.

Dipesh Dhakal, a member of the Nepal Tea Producers' Association — the representative body of 30 CTC tea factory owners — said Indian buyers have grown reluctant to purchase Nepali tea due to the risk of sample failures. 'Once the tea crosses the border, we cannot assume full responsibility for it. As a result, tea exports have almost completely stalled,' he said.

The Indian Side of the Dispute

The stricter testing regime did not emerge in a vacuum. It follows persistent complaints from Indian tea growers about the volume of Nepali tea entering their market. In October 2024, small tea growers in North Bengal intensified demands for restrictions on Nepali tea imports and threatened an indefinite sit-in protest at key points along the Indo-Nepal border.

This context suggests the SOP, while framed as a quality measure, also reflects competitive pressure from domestic Indian growers — a dimension that Nepali producers argue has turned a regulatory tool into a trade barrier.

Export Figures and Economic Stakes

According to Nepal's Trade and Export Promotion Centre, the country exported 11,393 tonnes of tea worth NPR 3.35 billion during the current fiscal year 2025–26 up to mid-May. The fiscal year closes in mid-July, meaning the shutdown arrives at a critical harvest and export window. The disruption threatens not only factory owners but also the farmers and daily-wage workers whose livelihoods depend on an uninterrupted production cycle.

With both orthodox and CTC segments now halted, and no resolution in sight, pressure is mounting on the governments of Nepal and India to negotiate an interim arrangement before the season's losses become irreversible.