Nepal is one of the most fertile places in the world to grow high-quality tea. And, naturally, tea remains at the centre stage of Nepali culinary culture. Like much of South Asia, Nepal indulges in boiled tea mixed with milk, sugar, ginger and cardamom; but Nepali tea cannot be put in the same cup as other varieties elsewhere, not least the Darjeeling tea. Both Darjeeling and Nepali teas share some characteristics: Both are produced in hilly areas under similar climate conditions. The flavour of Nepali tea, however, makes it a unique product.

Shades of Nepali tea

Nepali tea can be divided into two categories based on their processing techniques: Cut, tear, and curl (CTC) and orthodox. “Camellia sinensis”, the source of these teas, comes from the same plant. CTC tea blends well with milk because of its astringent flavour, creating a dark, potent liquid. CTC tea is primarily produced in an industrial capacity. Most domestic tea consumption (95 percent) in Nepal is CTC tea. Contrarily, orthodox tea is named after the traditional methods of producing tea, which include withering, rolling, oxidation and drying. White tea, green tea and oolong tea are examples of speciality teas, which are any other kind that is not processed like orthodox and CTC teas. Green tea leaves do not undergo fermentation, producing a light liquid with a grassy freshness. Aroma is what distinguishes speciality teas.

Nepali tea trade dynamics

Considering its massive potential, how does Nepali tea fare in the global market? China, Sri Lanka, Kenya, and India are the top tea exporters in the world; Nepal is the 22nd. There is little doubt that exporting in bulk to a neighbouring country, India, is the more straightforward choice for Nepal. Out of the total production of about 25 million kilogrammes, half of them are exported to different countries, with almost 96 percent of total tea exports going to its southern neighbour. However, India repeatedly attempted to halt the import of tea from Nepal. Moreover, the Tea Board of India threatened to revoke tea merchants’ import licenses and established several guidelines and limitations that importers must abide by if they imported Nepali Tea. According to Indian producers, Nepal’s lower tea pricing affects India’s ability to produce tea. If India imposes taxes on tea exports, Nepal fears for the future of its tea industry. India is the biggest purchaser of Nepali tea; thus, stricter criteria for the certificate of origin, as sought by an Indian parliamentary commission, would be devastating for local growers.

Positioning like Nepal tea collective

The international tea market requires differentiation, which is crucial in any business. Nepali tea businesses must provide customers with distinctive and alluring offerings to differentiate themselves from the competition and create a product demand for Nepali tea. Founded in America, the Nepal Tea Collective (NTC) is a public benefit company operated by Nishchal Banskota, a dynamic second-generation Nepali tea producer with a family lineage of 40 years in the tea industry. Banskota has spent the last six years giving Nepali teas a distinctive international character. Banskota also ventured into opening the first tea bar in Nepal. The NTC has improved the Nepali tea prospectus, bagging a bronze medal in the Global Tea Championship 2019 for white tea (speciality tea) and many other black teas that won people’s choice awards in many tea festivals. Unlike commercially produced teas worldwide, NTC has close connections with their own family tea farms and other smallholder farmers, where farmers hand-pluck every leaf in the serene hills of eastern Nepal at an altitude of 4000-6000 feet. It also has a crowdfunding campaign to give any tea lover worldwide, including the Nepali diaspora, opportunities to become investors with as little as $250.

Capitalising endless opportunities

Nepal’s $5 billion tea sector, which has promising sources of earning foreign exchange, is experiencing difficulties. For CTC tea, one of the causes of decreased output is the government’s inability to deliver chemical fertilisers like urea, one of the most crucial nitrogen sources. Moreover, a lack of irrigation infrastructure and an unstable electrical supply has hurt the tea industry. The workers receive meagre wages, and some traders claim the government stopped providing interest subsidies to the tea industry. Finally, the social security system will cover employees at government-owned tea estates based on contributions, which is a step in the right direction. Semi-skilled workers engage in tea plantations and cultivation, and skilled workers are required for tea processing and packaging. There are no big tea industries in Nepal, and it is a challenge to find skilled workers. Lately, this problem is also seen in Darjeeling.

With such a bleak scenario in the tea sector, farmers need motivation and incentives to produce more to contribute to the country’s income. The United States and the European Union demand large quantities of speciality tea. Therefore, the government needs to incentivise the tea sector and educate and encourage entrepreneurs about Nepal’s tea potential in the world market. Setting up a world-class tea industry ultimately generates massive employment in the economy. Increasing tea exports is impossible without improving the domestic production environment. Nepal has endless opportunities with the growing demand for orthodox and speciality tea in the international market. All that is needed is to seize the opportunity.