This article presents the findings of a study that analysed the Indian Bay Leaf (Cinnamomum tamala) Nees and Eberm value chain (VC) in Uttarakhand, India and Udayapur, Nepal. The results show that bay‐leaf VCs are loosely integrated and consist of stakeholders with asymmetrical power relations and different priorities. Traders in India dominate the chains and inappropriate standards lead to the exploitation of small producers and inequity in the chain. Policy measures are suggested for improving co‐ordination and competitiveness in the bay‐leaf VC which could be applied to the NTFP sector as a whole.