Nepal tea inflow puts India in a bind over Darjeeling and diplomacy

As duty-free tea varieties from Nepal flood the domestic mkt, challenging the iconic Darjeeling tea, India walks a tightrope, weighing geopolitical calculations and domestic political considerations

Falling production, shrinking global footprint, and a flood of cheaper imports from neighbouring Nepal – Darjeeling tea, celebrated as the “Champagne of teas”, is losing its aroma. 

The Mamata Banerjee-led West Bengal government has sounded the alarm urging the Centre to invoke the safeguard clause in the India-Nepal trade treaty, seeking protection for Darjeeling tea from the surge of unregulated Nepalese imports. 

Signed in 2009 and renewed every seven years, the India-Nepal treaty provides for a safeguard clause, which can be triggered if imports under the pact cause or threaten to cause serious injury to the domestic industry relating to any item. The determination of ‘serious injury’ is in accordance with the WTO Safeguard Agreement.

  But will the Centre risk straining ties with a key neighbour?

  Darjeeling, it seems, is caught in the crossfire of a classic Catch-22.

  Level playing field with Nepal

  Cheap tea varieties from Nepal, often indistinguishable to the average buyer, have duty-free access to the Indian market and have been a challenger to the Darjeeling tea for some time. 

A January 2025 White Paper by the Indian Tea Association (ITA) on Darjeeling tea industry noted that the volume of imports from Nepal surpasses the tea production in Darjeeling. The 189th report by the Parliamentary Standing Committee on Commerce—headed by Trinamool Congress member of Parliament, Dola Sen—among other agenda items, noted that the government must take measures to check the import of duty-free, low-quality, cheap tea varieties coming from Nepal, which are being sold as Darjeeling tea. Speaking to Business Standard, Sen called for a level playing field, adding that possible measures had been suggested in the report tabled in the Parliament. “Why should the India-Nepal treaty be such that the world famous

  GI-tagged Darjeeling tea is impacted adversely,” she asked.

  But treading on the Nepal issue may mean walking a diplomatic tightrope. As political analyst Sabyasachi Basu Ray Chaudhury observed, stirring up a debate on Nepal may not be feasible when India’s ‘Neighbourhood First’ policy is being tested, especially with its closest neighbours — Bangladesh, Myanmar. “However, not acting will have an effect on the Darjeeling tea industry,” he said.

  Long shadow of Gorkhaland stir

  Darjeeling’s problems do not start at the border, though.

  Cultural degradation set in with the Gorkhaland movement —  that called for a separate state — about 40 years ago, eroding a sense of belonging, B K Laskar, senior advisory officer, Tea Research Association (TRA), Darjeeling Advisory Centre, said.

“That’s why trade unionism in Darjeeling is much more entrenched than in the Terai or Dooars regions. If the charter of demands is not met, then workers stop work and that affects the crop.”

  The Darjeeling tea industry employs more than 55,000 workers on a permanent basis and engages approximately 15,000 workers during the plucking season — March to November. About 50 per cent are women.

  A mix of cultural dynamics, political shifts, and erratic weather negatively impacts Darjeeling tea, Laskar added.

  According to political analyst Basu Ray Chaudhury, the Gorkhaland agitation affected the tea industry over decades. “It ultimately precipitated into a 104-day shutdown for the industry in 2017 during the peak tea season.”

  Production that year fell to its lowest level — 3.21 million kg (mkg), down by more than 60 per cent from the previous year. And Nepal tea varieties made deeper inroads into the domestic market and exports.

  Stirring the political cauldron

  Last month, West Bengal chief minister Mamata Banerjee during  a visit to North Bengal, announced commissioning a testing lab to check mixing of Darjeeling tea with low-quality varieties. 

Banerjee questioned why Nepal was given duty-free benefits while Indian tea was subjected to a 40 per cent tariff. “It is coming at a very cheap price because they do not have to pay any tax…and we have to pay a tax of 40 per cent. This is getting mixed up in our tea, affecting the quality,” she said.

  Asked about the impact of Nepal varieties on Darjeeling tea, BJP MP from Darjeeling Raju Bista said that it was “five per cent of the issue”. He did not elaborate further.

  However, after the West Bengal government’s decision to allow 30 per cent of uncultivated land for non-tea purposes in February, Bista had reportedly raised his concerns with the state’s Governor C V Ananda Bose.

  Since 2009, the Darjeeling Lok Sabha seat has been with the BJP.

  Potential fixes on the table

  Amid the din, the industry continues to grapple with challenges.

  Towards the end of May, members of the standing committee under Dola Sen, met stakeholders of the Darjeeling tea

industry during a study trip to the tea-growing regions.

  “We presented the White Paper on Darjeeling tea industry and asked for a bailout package, which was also recommended by the erstwhile standing committee. We are asking for ₹41 crore a year,” Arijit Raha, secretary general ITA, said.

  “In view of the geopolitical considerations, if the subsisting FTA with Nepal allowing duty-free imports of Nepal tea cannot be altered, notifying a minimum import price indexed to the cost of production of Darjeeling (tea) could be considered,” he added.

  According to Anshuman Kanoria, chairman of Indian Tea Exporters Association (ITEA), the passing of Nepal tea as Darjeeling variety can be checked if it comes in packet form, which is easy to test for food safety compliance.

  “In order to protect national interest, we need to ensure that any tea that is imported for sale in the domestic market on a duty-free basis is sold in consumer packets of 1 kg or less and is in compliance with Indian FSSAI laws,” he said, adding reciprocal duties would be of no help as Nepal does not need to import Indian tea.  

  There are about 87 gardens in Darjeeling; many are facing cash loss — about 8-10 gardens are said to have closed.

But Darjeeling tea industry’s challenges are no secret. They are acknowledged and often discussed — but rarely addressed, an industry official said.