Tea-for-oil deal concluded in December 2021 (representative)
Cash-strapped Sri Lanka said on Wednesday it had exported $20 million worth of tea to Iran to partially repay a $251 million oil debt, with Colombo saying Tehran’s visiting foreign minister was “satisfied” with the deal.
“To date, exports to Iran under the barter agreement have been $20 million worth of tea.”
The tea-for-oil deal was struck in December 2021, but exports were delayed by Colombo’s economic crisis, forcing then-President Gotabaya Rajapaksa to step down in July 2022.
The barter saves sanctions-hit Iran from having to use scarce hard currency to pay for imports of popular tea.
It also allowed Sri Lanka to pay in tea, as the country lacked foreign currency.
The island defaulted on US$46 billion in foreign debt in April 2022 and received a US$2.9 billion bailout from the International Monetary Fund early last year.
Ceylon tea (known by its colonial-era name) accounted for nearly half of Iran’s consumption in 2016. However, this proportion has declined in recent years.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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