Ilam Tea: Nepal's Mountain Crop and the Families Who Grow It
Ilam in eastern Nepal produces some of Asia's finest teas at elevations above 1,500m. What the gardens look like, what the processing involves, and what the families running the estates do between harvests.
Germany pays six hundred and seventeen thousand dollars a year for Nepali tea. Japan pays three hundred and eleven thousand. In Kathmandu, most people are drinking something else.
The tea that leaves Ilam for Hamburg and Osaka is orthodox: whole leaf, hand-plucked, processed over 12 to 24 hours in a sequence of withering, rolling, oxidation, and drying that requires skilled monitoring at every stage. The tea Nepalis drink is CTC. Crush, tear, curl. Assam-variety leaves fed through serrated cylinders until they emerge as uniform pellets, dark and astringent, designed to hold their flavour when diluted with milk and spice. CTC accounts for 95% of domestic consumption in Nepal. Orthodox accounts for 90% of what Nepal exports.
The country grows both. It exports one and drinks the other.
Where the valley makes the difference
Ilam sits in Nepal's far east, in the foothills of the Kanchenjunga range, at elevations between 1,200 and 2,000 metres. The Maijogmai river cuts through the region and does something useful with the air: humidity rises from the river each morning, climbs the hillside, and meets the cold that descends from Kanchenjunga. The two collide at a specific elevation, producing the mist that settles over the tea gardens at dawn. By mid-morning it lifts.
The cycle repeats.
The cycle produces, in the leaf, a slow-grown complexity: the floral and fruity notes that have made Ilam tea a point of comparison with Darjeeling since the 19th century. The two regions share a border, the same topography, and nearly the same climate. Narendra Kumar Gurung, a third-generation Ilam tea farmer, has noted that an altitudinal and longitudinal difference of two to three kilometres is sufficient to have a direct and substantial impact on quality. The valley is not one thing. It is dozens of micro-climates arranged by slope and river bend, each producing a slightly different leaf.
1863 and what it built
Colonel Gajraj Singh Thapa, Governor-General of Eastern Nepal and son-in-law of Jung Bahadur Rana, visited Darjeeling in the 1860s and came back with a plan. Rana granted him the Ilam district as a Birta, a tax-exempt land donation, and Thapa established the first two estates: Ilam and Soktim. The original saplings came partly from China and partly from Darjeeling's plantations, which had themselves been built on East India Company infrastructure.
Five of the seven early estates that followed were developed under British Technical Collaboration. Nepal was never a British colony, but the tea industry it built in the 1860s was designed by people who had been running plantation economies across India for thirty years. The labour question those economies carried with them arrived in Nepal alongside the seeds: who picks the tea, under what terms, with what rights.
Nepal Tea Development Corporation, established in 1966 to manage the estates, was privatised in 2000, when the government transferred its holdings to the Triveni Group. The institutional structure changed. The labour conditions and land access questions it inherited changed more slowly.
Two industries, one district
Ilam district has 14,014 small and medium-sized tea gardens. Smallholders cultivate 9,845 of the approximately 17,000 hectares under tea: 58% of the land. Large-scale estate operations account for roughly 1%.
What became dominant was the family garden: a plot of two hectares, sometimes less, worked alongside maize, paddy, and kitchen vegetables. Gurung's description of a typical smallholder farm includes fodder and pastureland. Tea is one crop among several. The family that cannot sell its harvest at a fair price in February does not starve, because February is not the cardamom season.
Eighty percent of orthodox tea produced in Nepal is exported to India at prices often below production cost, because most Nepali producers lack organic certification. Without it, the premium markets in Europe and Japan are accessible only through Indian intermediaries who set the price. The farmer delivers the leaf to a buying centre. An Indian broker sets what it is worth.
Orthodox vs. CTC: two varieties, one territory
The difference between the two teas is not just processing. It is variety.
Orthodox tea in Nepal is grown from the Chinese variety of Camellia sinensis, var. sinensis: a smaller-leafed plant adapted to high altitude and cool temperatures. CTC tea is grown from the Assam variety, var. assamica, a larger-leafed, higher-yielding plant suited to the Terai lowlands of Jhapa district. A CTC factory cannot shift to orthodox production; the equipment, the skills, and the plant variety are different.
In FY 2021/22, Nepal produced 26,379 metric tons of tea. Roughly 18,900 of those metric tons came from Jhapa's CTC estates. The orthodox output, grown at altitude in Ilam and the neighbouring eastern hill districts, is smaller in volume and higher in value, when it reaches the right market.
The domestic market is not the right market. The chai Nepalis drink is made from CTC pellets in milk. It is strong, consistent, and cheap. Orthodox tea, served without milk in a manner suited to its floral profile, is a different drink. It has never found a significant domestic audience. The country's most distinctive agricultural product is consumed almost entirely abroad.
What Germany and Japan are buying
In 2023, Germany imported $617,000 worth of Nepali tea. Japan imported $311,000. The United States, France, and the Netherlands follow. The buyers are specialty importers and organic retailers for whom Himalayan provenance commands a premium.
Some exporters have built direct relationships: small batches of certified organic orthodox tea, labelled with estate names and harvest seasons, moving to Hamburg and Tokyo at prices that cover production costs and leave a margin. It is possible. But it requires certification, stable volume, and the kind of market access most Ilam smallholders cannot reach alone.
The elevation, the river mist, the slow-grown leaf: these are real, and the prices confirm it.
The question is not whether the tea is good. The question is who benefits when it is sold.
