India has always been a primary market for loose leaf tea from Nepal. A century ago the demarcation between Nepal and India was of little or no concern to growers who brought their leaves to the nearest factory for processing.
Today friction is building between India and Nepal over provisions of the Indo-Nepal Free Trade Agreement (due for renewal in 2017). Indians claim that Nepal is bringing low-cost teas across the border and want to block the import of orthodox* teas. Demand for Darjeeling teas is growing but production has declined to the point where buyers in the domestic market are finding it difficult to obtain sufficient quantities.
Sheo Shankar Bagaria, who chairs the Darjeeling Tea Association, told The Hindu newspaper that “teas, imported from our neighbouring country under the Agreement are sold to unsuspecting Indian customers in the retail markets. These teas were low-priced as tea is cultivated mostly in the unorganised sector where wages are 50 per cent lower.”
Bagaria wants restrictions on imports to protect both quality and the reputation of Darjeeling teas.
Almost all the 87 tea estates in Darjeeling reported losses during the last fiscal year, Bagaria said.
In 1991, Darjeeling produced 14 million kilos; total output last year was only 8.7 million kilos. From 2013–14, Nepal shipped 10.5 million kilos of CTC (cut-tear-curl) to India, more than the entire quantity of tea produced in Darjeeling. The exact amount is unknown because Nepal does not require producers to declare exports of orthodox tea. Another concern is that many of the Nepal gardens are now owned by Indian nationals who are said to be undermining Darjeeling’s premiere position.
There are several reasons why production has declined. These include climate change — a drought during the early spring flush followed by torrential rains — and high labor costs, which account for 60% of the cost of production. Almost 54% of the Darjeeling crop is now certified organic, which brings higher prices overseas but lowers yields by 15% or more.
During the recent annual meeting of the Darjeeling Tea Association (DTA), India’s President Pranab Mukherjee told members that “among all teas Darjeeling requires a special mention as it occupies a very unique place particularly for connoisseurs.”
President Mukherjee, who was visiting the area for three days, said the long-sought Geographical Indication (GI) designation that protects the rights of the region’s 87 growers makes it essential that producers comply with the formalities to fully benefit, according to The Economic Times.
*Tea leaves classified as orthodox are rolled and bruised to begin fermentation (not chopped). They are sold as either whole leaf or broken-leaf tea. Pekoe is a designation of leaf size (orange pekoe are the largest leaf particles). CTC (cut-tear-curl or crush-tear-curl) tea is produced by a modern, mechanical process that tears the leaf to induce oxidation. Orthodox and CTC are classified as broken-leaf, fannings and dust, but only orthodox can be sold as whole leaf.