Iran has stopped signing all contracts to import tea and basmati rice from India as of last week, Business Standard reported.
Several experts have expressed that this might be because India and Iran are working on the rupee trade settlement agreement, the report said.
It added that Iran imports around 30-35 million kg of orthodox tea and 1.5 million kg of basmati rice from India every year.
"There is no clarity on why suddenly this has happened. We have asked the Iranian buyers but they do not have any clear answer...We have informed the Tea Board and we are waiting for some clarity," Anish Bhansali, managing partner of Bhansali & Company, told Business standard.
However, the impact on basmati rice may be lesser as their exports have risen amid high demand from other countries. This is also due to high commodity prices globally amid the Russia-Ukraine war.
In the first eight months of 2022, between January and August, exports of tea from India increased by 14.8 per cent year-on-year (YoY) to 140.28 million kilograms, according to Tea Board data. During the January-August period in 2021, the shipments stood at 122.18 million kilograms (mkg).
However, tea shipments to Iran failed to increase due to economic sanctions imposed by the US on Iran, a report by PTI said earlier in November. Exports to that country marginally increased to 16.40 mkg in the January-August period as compared to 16.06 mkg in the corresponding period last year.