The Norwegian government is facing increasing pressure over its decision to snub the Dalai Lama when he arrives in the country on Wednesday, despite the fact that he has been invited by the Nobel committee to mark the 25th anniversary of his Nobel peace prize.

When the exiled Tibetan spiritual leader arrives in Norway on a three-day visit, he will not meet any representatives of the Norwegian conservative-led coalition government. The decision stems from the repercussions of the 2010 peace prize awarded to the Chinese dissident Liu Xiaobo, which angered the Chinese government to such an extent that it imposed an unofficial partial trade embargo on Norwegian salmon and froze trade talks.

In 2010 Norway enjoyed almost a monopoly on salmon exports to China, with a market share of 92% worth over 450m Norwegian kroner (£45m) a year. Over the following three years this fell to 29%.

"It's a big challenge doing business here after the shutdown from the Chinese authorities," said Sigmund Bjørgo, director of the Norwegian Seafood Council in China. "The Chinese population is expected to increase their salmon consumption by 30% per year. Sashimi is a growing trend which is becoming increasingly fashionable, and salmon is an important part of that. Though not the Norwegian kind."

The foreign minister, Børge Brende, announced last month that no representatives of the Norwegian authorities would officially meet the Dalai Lama during his visit, citing "the extraordinary situation where there is no real political contact between Norway and China".

Critics have accused the government of cowardice in the face of the seeming benefits of trade with China.

On Monday, the prime minister, Erna Solberg, defended her position, arguing that it was more important to keep the door open for dialogue with China. "It has been a difficult situation that we have not been able to work internationally with China for four years. Before 2010 we had a running dialogue with China about human rights issues. Norwegian experts were helping the Chinese to develop a better justice system. After 2010 we haven't been able to do this," she said.

Audun Lysbakken, the leader of the Socialist Left party, said: "We can't be dictated to by China in the sense of exchanging human rights for salmon. I am strongly in favour of improving relations with China, but this has to be founded on mutual respect."

An unofficial reception in a meeting room at the parliament on Friday is expected to be standing room only.