India, Iran ditch US dollar and then see rise in trade

Iran’s switch to currencies other than the US dollar is showing the first signs of paying off.

According to reports, traders say Iran overtook Russia as the top buyer of Indian tea last year, after the two countries agreed on a rupee-rial trade arrangement.

The two traditional trade partners launched the arrangement to bypass the illegal restrictions imposed by the US, which has been pursuing a “maximum pressure” policy against the Islamic Republic.

“This boost really has come because of the rupee-rial trade arrangement that we have had with Iran,” Azam Monem, one of India’s largest tea exporters, told Bloomberg on Monday.

Monem, who is the director at McLeod Russel India Ltd., said India’s diplomacy should allow the country “to remain a partner to Iran” which is a key buyer of Indian tea and rice. 

According to Bloomberg, Iran imported 53.5 million kilograms of tea from India last year, a rise of 74% from 2018.

The rise came even as Indian exports overall dropped 3% to 248 million kilograms last year as bad weather hit production in the crucial months of June and July.

Iran's Foreign Minister Mohammad Javad Zarif recently hailed longstanding relations between the two countries, emphasizing that relations between Tehran and New Delhi were unbreakable.

The remarks came less than a month after Indian media quoted Zarif as having said that India had actually put itself “on the receiving end” of US “bullying” by caving in to illegal sanctions and ending oil imports from the Islamic Republic.

“India has certainly taken a stance against the sanctions… so that’s been encouraging, (but) of course, we expected our friends to be more resilient vis-a-vis US pressure,” Zarif reportedly told a group of visiting journalists from New Delhi in November.

India was Iran’s second largest oil customer, importing 457,000 barrels of oil a day before the US unilaterally withdrew from the 2015 nuclear deal, officially called the Joint Comprehensive Plan of Action (JCPOA), in May 2018.

SS