Rice exports from India are under threat amid escalating military tensions in West Asia, with exporters expressing concerns over delays in payment and disruption to shipping to Iran, Afghanistan and several other Gulf countries.
Exposure is particularly high for basmati rice, as nearly 50% of India’s exports go to five West Asian countries – Saudi Arabia, Iran, Iraq, UAE and Yemen, making trade vulnerable to instability for a prolonged period.
In the wake of the US-Israel attack on Iran on Saturday, raising fears of wider regional instability and potential restrictions on shipping through the Strait of Hormuz, the Indian Rice Exporters Federation (IREF) on Sunday advised its members to avoid entering into new cost, insurance and freight (CIF) commitments towards Iran and Gulf destinations. Under CIF agreements, sellers bear the costs, insurance and freight for goods transported via waterways until they reach the buyer’s port.
The association advised exporters to conclude sales on “delivery on board” (FOB) terms wherever possible, so that shipping costs, insurance and related risks remain with international buyers.
It warned that developments in Iran and the United Arab Emirates could immediately impact bunker fuel prices and disrupt the availability of containers and bulk cargo ships. “In such circumstances, container shipments and bulk shipments can increase sharply and on short notice, exposing exporters to losses on fixed delivery contracts,” the association said.
It also warned that insurance premiums could rise sharply if the geopolitical situation worsens and urged exporters to exercise restraint while concluding new orders and avoid open and uncovered positions.
Basmati rice is the sector most at risk, as India is the world’s largest exporter of the grain, controlling more than 70% of global production, according to data from the American Agricultural Export Development Association (APEDA).
India exported about six million tons of basmati rice worth approx $50,000 crore in 2024-25, with demand mainly driven by West Asian countries, APEDA said.
With wholesale basmati prices already rising by 10-15% over the past month and Iran being a major market, the association said it would increase price volatility in the coming days.
Punjab and Haryana are among the worst affected states, as the two states contribute about 75% of the total exports of premium aromatic basmati beans. While Haryana’s share is about 35%, Punjab accounts for 40% of exports, according to government estimates..
Ranjit Singh Gosan, vice president of the Punjab Basmati Exporters Association, said, “The war prompted shipping companies to stop their cargo ships wherever they were, and the movement of materials and grains loaded on these ships also stopped.” He believes that if the conflict extends, exporters’ losses will increase and cause basmati prices to decline, affecting farmers of the aromatic grain.
“Some of the impact of the conflict on trade has already begun,” said Sushil Kumar Jain, president of the Haryana unit of the Rice Exporters Association.
Shipments that were heading to Iran or even to Afghanistan through Bandar Abbas Port, the largest port in Iran, were suspended. “These shipments will remain stuck until the situation improves, and this will impact the market. Payments may also be delayed,” Jain said.
According to data released by the government’s Agricultural Products and Processed Food Export Development Agency (APEDA), basmati exports to West Asian countries between April and December 2025 amounted to $27,197 Crores. Iran alone imported high-quality grain $6000 Crores.
(With inputs from PTI)
