Payment not a worry: Iran, Uco Bank tell tea traders

Kolkata: The Iranian government and Uco Bank have assured Indian tea traders that exports to Iran will not face any problem with payment.

In the past, some tea exporters faced delay in payment from Iran, which has created an air of uncertainty for the trade. Uco Bank has been facilitating bilateral banking trade transactions with Iran under the rupee payment mechanism since February 2012, as mandated by the government and the Reserve Bank of India.

Sujit Patra, secretary, Indian Tea Association, told ET that at a recent meeting, Iran’s ambassador and the Iranian commercial consular in Del- hi discussed with the representatives of tea traders several of the issues they were facing vis-à-vis tea trade with Iran.

“Here a number of issues came up for discussion. Uco Bank officials were also present at the meeting, Patra said. “The payment issue was also discussed and it was communicated to the tea trade that it will not face any problem on that front. We have also communicated to the Iranian officials that India can scale up orthodox tea production to meet export commitments.”

Iran has emerged as a big market for Indian orthodox tea—India shipped 53.45 million kg of tea to Iran in 2019, up nearly 74 per cent from the previous year.

Also, Indian tea fetched a price of Rs 275.68 per kg in Iran in 2019, which is 8 per cent higher than in 2018. Due to sanctions imposed by the US, India and Iran have been carrying out trade through a rupee account in Uco Bank. India deposits payments in rupees in Iran’s account for the oil purchased and then uses it to make payments to Indian exporters of goods to Iran.