Iran payment for India tea exports becomes regular
Payments from Iranian importers of Indian tea have become more regular in the past fortnight after worrying delays since late July, giving sufficient cash-flow visibility to exporters of the second-flush crop.
This year, Iran has picked up a record quantity of tea from India at prices generally higher than those last year. Exports to the Persian Gulf nation have more than doubled between January and July at 35.23 million kg, surpassing 30 million kg for the whole of 2018. Unit price realisation has also gone up by 15 per cent this year to ₹275 per kg. “Exporters were worried over payments as we faced glitches in the July-August period,” said Anish Bhansali, MD at tea exporter Bhansali & Co. “However, over the past fortnight, payments have become normal.”
Due to banking sanctions imposed by the US, India and Iran have been carrying out trade through a rupee account in the UCO Bank. As per this mechanism, India deposits payments in rupees into Iran’s account for the oil purchased and then uses it to make payments to Indian exporters of goods to Iran.
India had stopped buying oil from Iran because of the sanctions. Iran was the third largest supplier of crude oil to India, behind only Iraq and Saudi Arabia. But after the waiver from sanctions granted to India in November expired in May, India was forced to look elsewhere. These waivers were granted to eight countries for six months to help stabilise the internal oil markets.