India’s basmati rice exporters have sharply criticised global shipping lines for what they describe as “hypocritical” and “extortionist” practices in handling cargo stranded due to the ongoing Iran conflict and the resulting disruption at the Strait of Hormuz.
The Basmati Rice Farmers and Exporters Development Forum (BFEDF) said shipments worth millions of dollars remain stuck at inland container depots (ICDs), transhipment hubs such as Jebel Ali in the UAE, and even mid-sea, as carriers invoke force majeure to avoid delivery obligations while continuing to levy charges.
BFEDF Chairperson Priyanka Mittal told businessline that shipping lines are taking an “asymmetrical position” by citing force majeure due to war conditions to deny delivery, but not extending the same relief to exporters. “They are refusing to deliver cargo citing force majeure, yet continue to charge for containers. This is deeply unfair,” she said.
Exporters, particularly MSMEs, are bearing the brunt as mounting detention and ancillary charges in some cases amount to nearly 70 per cent of cargo value. With consignments stranded for over 40 days, the financial strain has intensified, especially for low-value shipments.
Mittal noted that some carriers are terminating voyages at intermediate ports such as Khor Fakkan or Fujairah, forcing exporters to arrange costly secondary transport—often ranging from $9,000 to $16,000—to reach final destinations like Saudi Arabia, Kuwait, and Qatar. Containers abandoned at Jebel Ali have similarly left exporters scrambling for alternative logistics.
The crisis has affected an estimated 150 containers, with cargo valued at around $3.3 million. The situation is further aggravated by port authorities issuing ultimatums to move cargo or face auction, while extreme temperatures of up to 40°C pose a risk to basmati rice, which cannot remain sealed in containers indefinitely.
While lauding the proactive response of the government, particularly the Ministries of Shipping and Commerce, Mittal said temporary relief measures such as ground rent waivers and short-term detention relaxations have provided some respite. The Directorate General of Maritime Affairs (DGMA) has also initiated consultations with affected stakeholders, though shipping lines were notably absent from a recent review meeting.
Calling for systemic reform, BFEDF has urged the establishment of a maritime commercial regulator to enforce transparency and fairness in freight practices, drawing parallels with regulatory frameworks like the US Federal Maritime Commission. Exporters have also demanded reciprocal application of force majeure, immediate release of containers, and withdrawal of retrospective charges, including war risk premiums.
Freight rates to the Gulf have surged dramatically—from about $500 to $3,500 per container—further compounding the crisis. Exporters warn that rising logistics costs will inevitably be passed on to consumers, potentially dampening demand and triggering a shift away from basmati rice in key markets.
With 65–70 per cent of India’s basmati exports destined for West Asia, the disruption has put a $7–7.5 billion export segment at risk. As the industry approaches the sowing season in June, stakeholders fear prolonged uncertainty could impact farmer sentiment and production decisions.
Comparing the current disruption to the Covid-era shipping crisis, Mittal warned that prolonged instability could lead to lasting demand erosion. “This is a sunshine export sector, but the entire ecosystem is now under stress,” she said, urging swift resolution and greater regulatory oversight to safeguard trade continuity.
