Iran-bound basmati rice exports hit a wall

New Delhi: The Israel-Iran conflict has impacted India’s rice exports, with around one lakh tonnes of basmati rice destined for Iran stranded at Indian ports, the All India Rice Exporters Association said on Monday.

With Iran accounting for 18–20% of India’s total basmati rice exports, the consignments, mainly stuck at Kandla and Mundra ports in Gujarat, remain undelivered, according to association president Satish Goyal.

Goyal also said that due to the Middle East conflict, neither vessels nor insurance are currently available for Iran-bound cargo.

The association is in touch with the Agricultural and Processed Food Products Export Development Authority (APEDA) under the Ministry of Commerce. A meeting with Union Commerce and Industry Minister Piyush Goyal is scheduled for June 30 to discuss the crisis, he added.

He noted that international conflicts are typically not covered under standard shipping insurance policies, leaving exporters unable to dispatch their consignments.

The shipping disruption adds to the challenges facing Indian rice exporters, who have previously grappled with payment delays and currency issues in the Iranian market due to international sanctions.

The delay in shipments and uncertainty around payments could lead to severe financial stress, he said, adding that domestic rice prices have already fallen by Rs 4–5 per kg.

Iran is India’s second-largest importer of basmati rice after Saudi Arabia. During the 2024–25 fiscal year, which ended in March, India exported around 1 million tonnes of the aromatic grain to Iran.

This development is likely to severely impact Punjab, the country’s top producer of basmati rice, which accounts for 40% of national output, followed by Haryana and other states.

India exported approximately 6 million tonnes of basmati rice in 2024–25, with demand primarily driven by Middle Eastern and West Asian markets. Other major buyers include Iraq, the United Arab Emirates and the United States.

Tea is also a key export commodity to Iran, with India annually shipping around 20,000–25,000 tonnes, mainly orthodox tea.

However, due to the conflict, fresh tea exports to Iran are currently on hold, according to officials in the Commerce Ministry.