A Memorandum of Understanding was signed between Minister of Plantation Ramesh Pathirana and the Deputy Minister of Industry, Mines and Trade of the Islamic Republic of Iran, to arrange facilities to export Sri Lanka tea to Iran.
The Sri Lankan tea industry which had a 47 percent market share in Iran in 2016, had dropped to 25 percent in 2020.
It was the result of issues in payment and the decrease of the Iranian Riyal. Sri Lankan tea exporters faced difficulties in obtaining funds from Iranian buyers, as there was no accepted mechanism to make payments through the bank system, as a result of the United States imposing sanctions on Iran in November 2012.
Through the signing of the MoU, Sri Lanka will be able to export tea at large to Iran, while it was also proposed to provide a long term debt payment plan to repay a long term loan amounting to USD 250 million, obtained from the National Iranian Oil Company by the Ceylon Petroleum Corporation.
The government said it was also proposed to repay the loan in rupees, and therefore Sri Lanka will be able to save foreign currency through the process.
