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Sri Lanka maintains trade deals with Iran, Russia in non-sanctioned areas

By: Staff Writer

May 12, Colombo (LNW): Sri Lanka is keen to expedite its economic partnership withUran and Russia, which has been severely impacted by U.S. sanctions, while for the island nation, increasing trade and securing foreign investments is critical at this juncture

Iran aims to navigate its limitations amid sanctions, with a focus on fostering trade, economic cooperation, and maritime connectivity, all of which are foundational to the emerging ties between Iran and Sri Lanka.

For many years, Russia has been a trusted friend and key partner in Sri Lanka’s development, consistently assisting without any conditions.

 The country played a crucial role in transforming Sri Lanka into an industrial hub by assisting in the establishment of sugar, steel, and tire production industries within the country.

Sri Lanka will deal with Iran and Russia for investments and trade without being caught into the United States-led sanctions, the island nation’s Foreign Minister Ali Sabry said.

Sri Lanka has been hit by Western sanctions imposed on Iran and Russia. The island nation could not receive $450 million from Iran for a recently opened Uma Oya multipurpose project started before the sanctions.

Sri Lanka was also forced to buy light crude from Malaysia and Dubai instead of Iran after 2012 sanctions.

The Western economic sanctions have already prevented Russian tourists from using their usual payment system and discouraged some visitors from Russia visiting to Sri Lanka, tourism industry officials say.

“We are not going into their sanctions. There are number of areas where the sanctions do not get caught. So, a lot of countries work on that,” Ali Sabry told reporters on Wednesday (08).

“We will do in terms of international rules and regulations,” he said citing how Sri Lanka is paying pending import bill of $251 million for crude oil to Iran.

Sri Lanka now exports tea to Iran for no dollar payment. Instead, Sri Lanka tea producers are paid by the state-owned Ceylon Petroleum Corporation (CPC) in rupees for the pending crude oil import payments for Iran.

“It is important for us that these captive markets are not neglected,” Sabry said.Iran President Ebrahim Raisi visited Sri Lanka last month on a official tour to launch the Uma Oya project.

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