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Israel-Iran Conflict: Why Did India Suspend Rs 150 Crore Worth Tea Exports To Tehran? Details Here

India has halted premium orthodox tea exports to Iran worth Rs 100–150 crore following network disruptions and erratic connectivity in Iran, as deepening Iran–Israel conflict poses broader risks for West Asian trade routes and oil market volatility.

According to exporters, Iran typically sources high volumes of orthodox tea from India during the second flush season—a premium crop window for exporters. (AI Generated Image)

India has suspended all shipments of premium orthodox tea to Iran amid widespread disruption triggered by the ongoing Iran–Israel conflict. The pause, affecting exports valued between Rs 100 crore and Rs 150 crore, was prompted by communication blackouts, closed commercial offices, and rising regional instability.
“It has been one week since the war began. The shipments for the past week are on hold as we are not able to establish contact with our buyers,” said Mohit Agarwal, director at Asian Tea Company.
According to exporters, Iran typically sources high volumes of orthodox tea from India during the second flush season—a premium crop window for exporters. But erratic connectivity and institutional closures in Iran have left consignments undelivered and contact lines dead.

“Offices are closed in Iran, and therefore, the exporters are not able to contact the Iranian buyers. Connectivity has become a major issue in Iran due to the war situation,” Agarwal added.

Industry insiders warn that the trade standstill has already led to a 5–10 per cent drop in orthodox tea auction prices, a market that had recently recorded record highs of Rs 314 per kg for Assam orthodox, up from Rs 295–Rs 299 last year.
Anish Bhansali, partner at Bhansali & Company, remarked, “Exports to Iran have come to a standstill and prices may fall further. Moreover, uncertainty looms over exports to Iraq, UAE, Saudi Arabia and Qatar as these shipments pass through the Strait of Hormuz, which Iran is controlling.”
The situation is compounded by fears of military escalation affecting strategic shipping routes. The Strait of Hormuz, critical for global oil and cargo movement, remains under Iranian influence. Even indirect threats to close the strait have historically driven oil market spikes and global logistics panic.
Dipak Shah, chairman of the South India Tea Exporters Association, noted exporters are proceeding with extreme caution. “Exporters are taking a cautious stance as freight costs and insurance expenses for shipments are likely to increase if the Iran–Israel conflict prolongs,” he said.

Market Dependence and Export Volumes

The broader West Asian region—including Iran, Iraq, UAE, Saudi Arabia, and Qatar—accounts for roughly 90 million kg of Indian tea consumption annually, or 35 per cent of total tea exports. Disruption in this corridor poses substantial threats to India’s tea industry.
In 2024, India exported 255 million kg of tea valued at Rs 7,111 crore. Of this, Assam and West Bengal contributed 154.81 million kg worth Rs 4,833 crore, while South India added 99.86 million kg worth Rs 2,278 crore.
Iran, a key consumer of orthodox tea, sources an estimated 35 million kg annually from India. Tea firms now worry that the second flush season—traditionally the industry’s top foreign exchange earner—could be significantly affected if the impasse continues.
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