Tea exports to Iran, a major importer, have fallen by nearly 25 per cent to 10 million kg in January-August as traders are clueless about the mode of payment to that country, an official of Indian Tea Association said.

“We have come to know from the media that the Iran payments crisis is resolved. Subsequently, we have written to the Finance ministry 15 days ago seeking confirmation and the modalities involved. So far, no response has come from the government,” the official told PTI. The official said that Iran is a major importer of the high quality orthodox tea.

He said exporters are stuck with the consignments of orthodox tea, since they are not sure whether they would get payment for shipments.

While payments for exports were made in US dollars earlier, this mechanism has been stopped by the RBI following pressure from the US government.

Following the payments crisis, exports were down by 4 million kg between January and August this year.

Compared to last year, price of high quality orthodox tea is down by Rs 10 per kg, the official said.

“The industry is very concerned and a meeting has been called to discuss the issue,” he said.

The tea industry has sounded a warning about the deepening crisis stemming out of the payments issue, which has the potential to cause the vital Iranian orthodox market to slip out of the Indian exporters’ grasp.

The industry has worked hard to develop the market, the size of which is approximately 100 million kg and in which India’s share is 15 million kg.

Unless the problem is solved, then other countries such as Sri Lanka would increase penetration in the Iranian market at the cost of Indian exporters.

Following the imposition of US sanctions on Iran, dollar and euro-based transactions with the West Asian country have been stopped, leading to a crisis over the mode for making payment.

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