Souring relationship between India and Nepal may help Darjeeling tea industry

Kolkata: The souring relationship between India and Nepal in recent weeks may help Darjeeling tea industry, which has lost export markets for its premium first flush teas owing to the spread of Covid-19 globally and is now depending on increasing domestic sales.
Nepalese teas have captured a sizeable portion of Darjeeling tea’s domestic market since 2017, when the four-month agitation in the hills from June to September had paralysed operations at the tea estates. In 2019, Nepal had exported teas worth Rs 63 crore to India. Nepalese teas are cheaper than Darjeeling tea but are often passed off as Darjeeling tea to unsuspecting buyers, hurting premium tea growers and traders.

Darjeeling tea, on the other hand, has takers among discerning tea drinkers in Delhi, Mumbai and Bengaluru, besides Kolkata, who are ready to pay extra for this premium tea.

Although Nepal has asked India to allow export of its teas to the country, Darjeeling tea traders said the government should maintain status quo on the issue.

“Since Nepal has free trade agreement with India, we cannot ask the government to stop entry of Nepalese tea to the country. For the time being, we feel status quo should be maintained,” said Kaushik Basu, secretary, Darjeeling Tea Association (DTA). “If at all Nepalese tea makes its way into India, it should abide by the standards laid down by the Food Safety and Standards Authority of India.”

The boundary dispute between Nepal and India has escalated since the former’s release of a new political and administrative map depicting Kalapani, Limpiyadhura and Lipulekh, the territories that India also claims as its own, within Nepal’s borders. The map was issued in response to the inauguration by India of the road that passes via Lipulekh to connect Kailash-Mansarovar in the Tibet Autonomous Region of China.

Darjeeling tea has lost 45-50% of its output year-on-year till June owing to the lockdown. The first flush teas, which are mostly exported, have been lost completely. Germany, UK, USA and Japan are major buyers of Darjeeling teas. “These countries are also going through the pandemic and there is a lot of economic uncertainty there too. It will have an impact on Darjeeling tea exports,” said Basu.

Darjeeling exports about 4 million kg of teas out of its total production of 7.8-8 million kg of teas annually.

Darjeeling tea planters said production of tea in Nepal had been going on in full swing despite the pandemic. “They have enough teas and they are keen to export,” said a Darjeeling tea trader, who did not wish to be identified.

Basu said the DTA has urged the West Bengal government to regulate the sale of imported tea from Nepal in the state. “Since there is very little Darjeeling tea in the market now, it will be easier for Nepalese tea to capture the domestic market if its entry is allowed,” he said.