Tea factories in Ilam’s Suryodaya Municipality have announced a shutdown from June 15 following restrictions imposed by the Tea Board of India on Nepali tea exports.

The Suryodaya Orthodox Tea Producers Association Nepal said the decision was driven by an inability to sell processed tea, full storage facilities, and a growing inability to pay farmers for green tea leaves already purchased. The association represents 53 tea factories, all of which will halt operations.

According to industry stakeholders, shipments of Nepali tea have been stuck in Kolkata for weeks due to new regulations introduced by the Indian Tea Board. More than 300,000 kilograms of Nepali tea already in India are reportedly held up for quality inspection, while over 700,000 kilograms remain unsold in storage in Nepal.

Association chair Dilli Shrestha said factories had no option but to shut down as both sales and storage capacity had collapsed.

“Tea processed after purchasing green leaves from farmers cannot be sold. Warehouses are full. We are unable to pay farmers, so continuing operations is no longer possible,” he said.

The crisis has coincided with the peak first flush season when high-quality orthodox tea is typically produced. However, industry leaders say the timing has worsened the situation after India introduced a new Standard Operating Procedure (SOP) on May 1, requiring mandatory quality testing for every consignment of tea exported from Nepal.

Under the new rules, testing reports can take more than two weeks to be issued, during which shipments cannot be sold. If samples fail inspection, the tea must either be destroyed or returned, significantly increasing commercial risk for Nepali exporters.

Association general secretary and tea producer Gopal Kattel said the current disruption is more severe than previous trade barriers.

“India has often created hurdles in the past under various pretexts. But this time, even tea that has already reached the market cannot be sold. It appears less like a quality control measure and more like an attempt to block Nepali tea from the market,” he said.

Industrialist Punam Rai called the restrictions discriminatory, arguing that allowing tea to pass through customs only to be held in warehouses later was unfair.

“If the issue was truly quality, inspection should happen at the border. Blocking sales after the product has already reached the market is not justified in any way,” she said.

The shutdown is expected to hit thousands of tea farmers directly. According to the association, nearly 2,995 farmers are associated with tea cultivation in Suryodaya Municipality alone. Tea is grown across 33,655 ropani (1,712.097 hectares) of land in the municipality, producing around 20 million kilograms of green tea leaves annually.

Suryodaya Municipality has urged Nepal’s Ministry of Foreign Affairs to engage in high-level diplomatic talks with India to resolve the issue. It has described the Indian Tea Board’s latest move as a non-tariff barrier, warning of serious consequences for the tea industry, farmers, workers, and the broader economy.

According to the National Tea and Coffee Development Board, Nepal exports more than 7 million kilograms of orthodox tea annually, with over 90 percent going to India. The country earns about Rs4.25 billion each year from processed tea exports.