• Nepali Banks Curtail Tea Exports Over Fear of Secondary Sanctions

    Nepali banks, fearful of secondary sanctions, are no longer issuing export certificates known as CADS (Cash Against Documents), complicating tea sales to Russia. Trump administration threatens to go “all in” on sanctions.
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    Nepal Placed on Financial Grey List

    US Treasury Secretary Scott Bessent threatened to go “all in” on sanctions on Russia this week to obtain a cease-fire in the Ukraine war.

    In recent months, U.S. regulators enforcing sanctions have warned banks worldwide that facilitating transactions could result in potential measures, including asset freezes and exclusion from the U.S. financial system.

    On Thursday, the US also said it would ramp up sanctions on Iran: “Making Iran broke again will mark the beginning of our updated sanctions policy,” according to a report by Bloomberg News.

    The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it has broadened its sanctions framework to impose secondary sanctions on foreign financial institutions (FFIs) that conduct or facilitate significant transactions involving technology, defense, construction, aerospace, or manufacturing goods or services that support Russia’s military industrial base.

    Workarounds have been in place since the invasion of Ukraine, but Nepal is more vulnerable than tea suppliers Kenya, Sri Lanka, and India, which has established a rubles-for-rupees trade agreement administered by international banks that continue to enable transactions (primarily for oil and natural gas).

    Nepal’s February placement on the Financial Action Task Force (FATF) grey list will likely further hamper trade, regardless of destination.

    The Economic Times reports the listing has “brought to fore the fact that Nepal has emerged as a haven in South Asia for money laundering owing to the absence of economic stability, lack of comprehensive and long-term vision and guidelines, weak interrogative system, lack of well-trained bureaucracy, and an open border and high levels of informal transactions with India, said people familiar with the matter.”

    Nepal planter Anshu Giri who manages Samsher Tea, writes: “Banks are afraid of secondary sanctions. But the bigger problem is Nepal’s idiotic and archaic forex control regulations. The government mandates a CAD “certificate”, 100% Advance payment proof, or LC documents to be presented during outbound customs clearance (for countries other than India). When the inward remittance is received, the funds are settled.”

    According to the Ministry of Agriculture statistics, Nepal produces 26,379 tonnes of tea annually on over 20,237 hectares, of which 18,902 metric tons is CTC tea.

    Nepal annually shipped around $1.85 million worth of tea to Russia before COVID-19. That total began to slip with the imposition of sanctions following Ukraine’s invasion, mainly due to constraints on the Russian economy. Exports by value have since declined to less than $1 million a year.

    Russia has not lost its taste for Nepali tea. During the first five months of the current fiscal year, Nepal exported 108 metric tons to Russia, valued at Rs 58.39 million (about $420,000 in US dollars).

    Pre-payment or government-backed guarantees for CAD transactions could provide temporary relief to growers.

    John Snell, principal at NMTeaB consultancy, writes that Kenya and Sri Lanka use barter as an option. “Barter trade works outside the norms of financial exclusions and is comfortable for Russia and India, so Nepal should be too!”

    Sri Lanka exporters currently deal with Russia using documents sent directly to the importer, who then pays on the agreed-upon date or dates. Open delivery terms avoid the need to obtain CADs from banks. Russia imports around 25,000 metric tons of mainly orthodox tea annually, valued at $122 million in 2023.

    The notification from Giri’s Kathmandu bank reads, “Due to the internal policy of this bank, the bank is not able to accept any import/export transactions related to Russia.”

    Giri said the threat of secondary sanctions on banks will not prevent him from trading with Russia – prepaying is an option, but credit is preferred.

    “The industry runs on credit,” writes Giri.

    Other Workarounds

    Commodities supply chain expert Sam Lambert at ZenGate Global suggests using stablecoins (crypto payment rails), which have already seen considerable adoption in other markets (about USD 142 billion on-chain). He said stablecoins are easy to adopt (you only need a way to off-ramp into the local currency).

    Collateral-backed assets are another option, writes Lambert. “You could tokenize other batches of tea that are stored in warehouses. In other commodity markets, there are systems called Warehouse Receipts – these are typically accepted as a form of bank collateral, allowing producers to borrow money against it. You would need a reliable Oracle system and auditors to pull this off. But it has been done all over the world in non-tea markets.

    Dan Bolton | Podcast Host

    Dan is a content creator who fosters genuine connections globally through informative, educational, and captivating conversations centered on tea. Tea Biz Blog | Podcast

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  • Kangra Looks Towards West Bengal for Tea Tourism Inspiration | West Bengal Government to Meet Tea Industry Stakeholders

    India Tea News for the week ending February 21, 2025
    Aravinda Anantharaman | Tea Journey Editor

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    View of MacLeod Gaj
    View of MacLeod Gaj, a suburb of Dharmsala

    Kangra Looks at West Bengal Model for Tea Tourism

    Kangra’s tea planters have been calling for friendlier policies to make their tea estates financially viable, and tourism has been at the top of that list. Media reports that Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu has recently announced that the government was making efforts to boost tourism, and tea tourism was part of it. They would study the West Bengal tea tourism model, where 15% of the land can be used for tourism and allied business activities. Kangra’s planters have said that driving tourism will help generate greater interest in tea and support the business, which, despite a rich history, has struggled because of its distance from Kolkata’s tea hub. Kangra has a strong green tea-making tradition, with still-standing china bushes. With 15 estates, 1,526 small growers, and 11 bought-leaf factories producing a million kilos annually, Kangra’s tea industry needs a more substantial roadmap to stay the course. Tea tourism could also be a strong addition.


    West Bengal Government Call For Meeting

    Following last week’s news of protests and opposition to West Bengal’s policy changes related to tea, the state government has called a meeting on Monday, 24th February in Kolkata. State labor minister Molay Ghatak will convene the meeting and will include representatives of the tea planters’ association, including the chairman of the tea board, representatives of planter associations, including the Tea Association of India, Darjeeling Tea Association, and small tea growers’ associations.


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  • Darjeeling Faces A Challenging First Flush | Growers Ask for 100% Auction Sales | Two Tea Brands Raise Funding

    India Tea News for the week ending February 14, 2025
    India Tea News | Aravinda Anantharaman

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    Darjeeling tea harvest begins Feb. 27
    Darjeeling tea harvest begins Feb. 27

    Darjeeling Faces A Challenging First Flush

    In 2024, Darjeeling saw one of its most challenging years, reflected in the low production of 6 million kilos, the lowest in several years. The year has opened to a few challenges already. Media reports say that the Chief Minister, Mamata Banerjee, announced last week that the ceiling of land for non-tea use on tea gardens would be raised from 15% to 30%. Many gardens are using this option to explore hospitality as a revenue source. However, the news has not gone down well with the majority of the Gorkha population. Led by Ajoy Edwards, the newly minted political party, Indian Gorkha Janshakti Front staged a protest last week. Their issues relate to implementing minimum wages, an assurance of 20% as the annual bonus, and land rights. This is worrying as the tea board had announced 27th February as the date of plucking in the hills, following the winter closure of gardens. And protests could hinder the region’s most crucial harvest season. Of the 87 tea estates within the ambit of Darjeeling tea (protected by the GI), The Telegraph has reported that 12 have closed.


    Growers Want 100% Tea in Auctions

    Various members of the Indian tea industry associations, including the Indian Tea Association (ITA), Tea Association of India (TAI), and Confederation of Small Tea Growers Associations (CISTA), met in Kolkata last week to discuss current challenges. The small tea growers’ complained that the current price-sharing formula does not compensate for the cost of production. The associations also spoke about the current lack of bargaining power with producers. Consequently, the key takeaways were that one, a minimum sustainable price of made tea, indexed to the cost of production and quality, is to be introduced, and 100% of made teas should be sold via auctions – currently, 50% is mandated to be sold via auctions. Interestingly, Kenya introduced a minimum price for tea for its large and small tea grower segments in 2021. This was withdrawn in 2024 because of the 100mn kilos of unsold tea, as buyers refused to pay for poor quality tea at the minimum set prices. Mombasa auctions tea from a dozen competing African countries, giving buyers a choice of buying premium-grade tea at prices near or slightly above the minimum or purchasing lower-grade tea at much lower prices than the minimum.


    Two Tea Brands Raise Funding

    Two tea companies have had a successful fundraising round this fortnight. Upamanyu Borkakoty of Assam’s Woolah Tea pitched to the jury on Shark Tank India 4. He presented his patented green tea balls, which avoid the use of plastic or paper for single-serve tea. He has come away with an investment of Rs 50 million or USD 57,000 from Aman Gupta, co-founder of boAT speakers and sound systems. Upamanyu follows other tea brands like Tea Fit and Dorje Teas that have appeared on the show.

    In the south, Croft Beverages has raised USD 125k in pre-seed funding. Last year, Croft set up its first farmer-owned mini factory in Billicombai, Nilgiris. The company plans to scale and build 100 mini-factories by 2030 to support a sustainable tea industry here.


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  • Indian Tea Industry Flags Poor Imports | Chai Point Aims For Guinness Record at The Kumbha Mela | 2nd Inter Tea Garden Football Tournament in Assam This Week

    India Tea News for the week ending January 24, 2025
    India Tea News | Aravinda Anantharaman

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    Kumbh Mela
    Maha Kumbh Mela Pilgrimage | The largest human gathering in the world

    Indian Tea Producers Flag Sub-Standard Imports

    Even as Darjeeling’s tea producers express concern about illegal imports from Nepal, this week, the Confederation of Indian Small Tea Growers Association (CISTA) has submitted a letter to the Union Commerce Minister Piyush Goyal expressing concern about the growing influx of low-quality teas from Kenya and Nepal. The letter said that these imports impact the quality of Indian tea, along with demand and pricing.

    CISTA President Bijoy Gopal Chakraborty shared data that shows a 288% increase in Kenyan imports between January and October 2024, from 3.53 million kg in 2023 to 13.71 million kg. These teas are used for blending and re-exports. Imports from Nepal stood at 13.66 million kg, much of it being sold within the country. He highlighted the lack of regulatory food safety measures on imported tea, particularly from Nepal.

    Eight years ago, the Tea Board decided to counter oversupply by insisting that gardens in north India close for winter. The letter said that the unchecked flow of imported tea undermines these efforts. Flooding the market with cheap, inferior-quality teas will affect the reputation of Indian tea. This letter follows a submission by the Indian Tea Association last week on the issue of Nepal tea.


    Chai Point Set to Create a Record at The Maha Kumbh

    The 45-day Maha Kumbh Mela, an important Hindu pilgrimage in Uttar Pradesh, is ongoing. The event is expected to see 250mn people. Chai Point, the Indian tea brand, was selected as the tea partner along with the Karnataka Milk Federation (KMF). Together, they expect to serve over one crore or 10 million cups of tea, hoping to set a Guinness World Record for the most cups sold at a single event. The Maha Kumbh began on the 13th of January and is expected to conclude on February 26th. Chai Point has set up 10 stores for visitors to the Kumbh.


    Women’s Football Thrives in Assam’s Tea Gardens

    To promote football among young girls living in tea gardens, the Assam Tea Tribes Sports and Cultural Association has planned an All Assam Inter Tea Garden Women’s Football Tournament in Dibrugarh. This will be the 2nd edition of the programme. The preliminary round will kick off this week across the state.


    Singpho Chief Nong Passes at 71

    Singpho chief Duwa Bisa Nat Nong has passed at 71. The government of Assam gave him full state honors at a cremation ceremony on Jan. 17. Chief Nong was a descendent of the Singpho chief who introduced British explorers to the Assamica tea bush 180 years ago. His mortal remains were carried on a six-wheeled catafalque pulled by his family members, relatives, well-wishers, and community members. More than a thousand people from Assam and Arunachal Pradesh attended the cremation.

    Nong was the last political Jamedar of India and the Mauzadar of the Tirap Mauza in the Tirap tribal belt under the Margherita subdivision in the Tinsukia district of Assam.

    Duwa Bisa Nat Nong
    Chief Duwa Bisa Nat Nong

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  • Wagh Bakri Plans Expansion in 2025 | Tocklai Launches Learning Platform

    India Tea News for the week ending January 17, 2025
    India Tea News | Aravinda Anantharaman

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    Wagh Bakri Tea Group inaugurates a 2nd contemporary two-storied Tea Lounge in Ahmedabad.
    Wagh Bakri Tea Group inaugurates a second contemporary two-storied Tea Lounge in Ahmedabad. Photo courtesy/Wagh Bakri Tea

    Wagh Bakri To Expand its Instant Tea Business

    Wagh Bakri Tea has ended 2024 on a high note, with annual sales reaching 60 million kilos, making them India’s 3rd largest tea manufacturer with a 9% market share. 2025 will continue to be bullish as the company has announced its expansion plans.

    This includes a new manufacturing unit in Dakor, Gujarat, which will boost Wagh Bakri’s instant tea blending volumes fourfold to 20,000 packets per day. The facility is being set up with an investment of over $10 million and is expected to open later this year. It will accommodate greater storage as well. The company is a significant buyer of Indian tea and imports a small volume from Kenya and Sri Lanka.

    The company is focused on its domestic market and plans to deepen market penetration in the south and east. In its hometown, Ahmedabad, its market share is at 80%. The aim seems to be to close the gap between the top two contenders, HUL and Tata Consumer Products. Wagh Bakri operates 55 tea lounges across the country with plans to open 8-10 new ones annually.


    TRA Launches Learning Platform

    The Tea Research Association (TRA) Tocklai, the world’s oldest and largest tea research institute, has unveiled LearnTea. This global learning platform distills over 100 years of tea cultivation expertise into accessible courses for enthusiasts and industry professionals worldwide. LearnTea offers deep insights into tea science—from thriving garden management to tackling climate challenges.

    The online courses are designed for tea enthusiasts and professionals who are engaged in tea plantations and are taught by experienced resource persons. There are six courses up at the moment, and the fee ranges from Rs 500-800.

    LearnTea has been designed in-house by Rituraj Sharma, Communications Officer TRA Tocklai. “The idea of the online tea courses is to share Tocklai’s tea knowledge with both the Indian and global tea industries while also generating revenue through these courses. The response has been good,” said TRA Secretary Joydeep Phukan.

    TRA serves the research and development needs of the Indian tea industry, promoting research aimed at enhancing productivity and quality. A pioneer in tea R&D, TRA also provides extension services to the industry. The Tocklai Experimental Station was established in 1911.
    Roopak Goswami


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