Escalating hostilities following recent US and Israeli strikes on Iran have cast a shadow over India’s basmati rice trade, dealing a significant blow to exporters in Punjab and Haryana — the two states that together account for nearly 75% of the country’s premium basmati shipments.
India remains the world’s leading basmati exporter, contributing over 70% of global production. In 2024–25, the country exported around 60 lakh tonnes of basmati rice worth approximately ₹50,000 crore, with nearly half of the volume destined for West Asia — now at the centre of rising geopolitical tensions.
In response to the unfolding crisis, the Indian Rice Exporters Federation (IREF) has advised its members to refrain from entering into new “cost, insurance and freight” (CIF) contracts with buyers in Iran and other Gulf nations. Instead, exporters have been urged to conclude deals on a “free-on-board” (FOB) basis, shifting freight, insurance and transit risks to overseas buyers.
The federation cautioned that continued conflict could severely disrupt shipments and trigger a sharp escalation in freight and marine insurance premiums.
According to IREF, five key destinations — Saudi Arabia, Iran, Iraq, United Arab Emirates and Yemen — together account for nearly 50% of India’s total basmati exports, underlining the sector’s heavy reliance on the region.
Trade at Risk
Ranjit Singh Jossan, Vice President of the Punjab Basmati Exporters Association, warned that the conflict threatens the long-standing rice trade between India and Iran, historically one of the largest buyers of Indian basmati.
“If the war continues, trade could come to a standstill,” he said, adding that exporters may face mounting losses and a potential fall in basmati prices, ultimately affecting farmers.
Shipping disruptions are already being reported. Some cargo vessels are said to have halted mid-route, while others have offloaded shipments at nearby ports, issuing notices that additional charges would be borne by exporters.
Direct shipments from India to Iran had already slowed in recent months amid rising geopolitical tensions. Over the past three months, around three lakh tonnes of basmati were routed to Iran via the traditional trans-shipment channel through Port of Jebel Ali, from where smaller vessels transported cargo to Iranian ports.
Exporters have also flagged heightened security risks in the Red Sea and the Strait of Hormuz — critical maritime corridors for West Asian trade.
Payment, Port and Logistics Concerns
With consignments already en route to Iran, Saudi Arabia, the UAE and Qatar, exporters are anxious about shipment disruptions and potential payment delays. There are fears of tightening banking channels and delayed international settlements if sanctions or financial restrictions intensify.
Jossan also cautioned that large shipments could become stranded at Indian ports if the situation deteriorates, potentially driving down domestic prices due to oversupply.
Compounding concerns, Iran’s Government Trading Corporation (GTC) recently issued purchase orders for around 1.6 lakh tonnes of Indian basmati rice — orders that now face uncertainty.
There are additional apprehensions about possible disruptions at Bandar Abbas Port, Iran’s largest commercial port. Any operational setback there could have cascading effects not only on Iranian imports but also on trade routes connected to Afghanistan, Turkmenistan, Turkey, Uzbekistan, Tajikistan, Armenia and Russia.
Export Data Highlights Exposure
Data from the Agricultural and Processed Food Products Export Development Authority (APEDA) shows that basmati exports to West Asian countries between April and December 2025 stood at ₹27,197 crore. Major markets during the period included Saudi Arabia, Iran, Iraq, the UAE and Yemen.
With West Asia accounting for a substantial share of India’s premium rice exports, industry stakeholders warn that a prolonged conflict could have ripple effects across the supply chain — from exporters and shipping lines to farmers in northern India.
