KATHMANDU, June 18: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged the government to initiate immediate diplomatic efforts to address disruptions in tea exports to India caused by new standards introduced by India's Tea Board.
In a press release issued on Tuesday, FNCCI said the new Standard Operating Procedure (SOP), which came into effect on May 1, and the requirement for mandatory quality testing of every consignment have created serious challenges for Nepal's tea industry.
According to the federation, the new provisions have made the export process more cumbersome and threatened the smooth operation of the tea industries.
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FNCCI stated that Nepal's tea sector is a key contributor to agriculture, industry, exports, and employment, generating annual business worth Rs 12–14 billion and exporting more than Rs 5 billion worth of tea to India each year.
The federation said the sector provides direct employment to more than 60,000 workers and contributes around Rs 1 billion annually in government revenue.
FNCCI noted in the press release that the new Indian regulations require quality testing for every shipment, with test reports taking 20 to 25 days to be issued. Additional requirements, including mandatory warehouse charges and provisions requiring the destruction of consignments that fail quality tests, have nearly brought exports to a standstill.
As a result, industries are facing cash-flow problems, making it difficult to pay tea farmers for green tea leaves, provide workers' wages, and meet tax and electricity payment obligations, according to the federation.
The federation also stressed the need to establish an internationally accredited laboratory in Nepal to address long-term quality-related export issues. It said it has repeatedly drawn the government's attention to the issue and called for concrete action.
Stating that the livelihoods of thousands of farmers, workers and entrepreneurs depend on the tea sector, FNCCI urged the government to treat the issue as a priority and seek an immediate solution through diplomatic channels.
It also called on the Ministry of Industry, Commerce and Supplies to engage with the neighboring country to remove the barriers affecting tea exports.
