Kolkata, India, June 16 - Exports of premium Darjeeling tea may fall 20-25 percent this year as political unrest in the hill region has shut banks and disrupted transport in the peak of the plucking season, an industry official said.
The Gorkhas, who are ethnic Nepalis, are demanding that a separate state called "Gorkhaland" be carved out of the eastern state of West Bengal to protect their culture and heritage.
Strikes and protests have roiled the region for a week, and thousands of tourists, another mainstay of the local economy, have been forced to cut short their trips.
"There is utter chaos in the hills and we are losing over 20 million rupees ($470,000) a day," Rajiv Lochan, secretary of the Siliguri Tea Traders' Association, told Reuters on Monday.
At least 1,200 people died in the first Gorkhaland campaign in the 1980s, but protests ended a few years later after Gorkha leaders accepted limited autonomy.
Exports of Darjeeling teas were targeted to rise 20-25 percent over last year's 6 million kilograms but now the industry is staring at substantial losses from a year ago.
"We estimate exports will be down 20-25 percent over last year," Lochan said.
Tea from Darjeeling accounts for seven percent of India's tea exports and the region churns out about 10 million kg of high-quality brews famous for their flavour, and which fetch 5-6 times the price of normal CTC (crush, tear, curl) tea.
Most of it goes to the Middle East, Pakistan, Russia, and Germany.
Protesters have exempted tea gardens from strikes, but with banks closed and transport hit, trade has been affected at a key time.
The peak harvesting season for Darjeeling tea is April-June, after which the quality deteriorates and prices fall. Rains in May kick off the so-called "second flush" of fresh leaves.
"This is the season of the second flush, when the best quality tea is produced," Basudeb Banerjee, chairman of the state-run Tea Board, said.