Under new banking directives made necessary because of US pressure payments by Iran for its Indian tea purchases may become difficult to make.

“Until December 27, 2010, the tea trade operations were smooth, however, post that, owing to the US pressure, India pulled out of the Asian Clearing Union, a system where it could settle payments with Iran,” C S Bedi, chairman, Indian Tea Association, was reported as saying by FnB News.

A newly updated Letter of Credit (LC) trade system for Iran issued by the Reserve Bank of India has effectively prevented settlement of accounts by Iranian buyers.

This has left many Indian orthodox tea concerned that an unresolved payment issue could cost them dearly as Iran is one of India’s best orthodox tea customers.