Why India's basmati rice exports to Iran is down
What's the story
Civil unrest in Iran is affecting India's basmati rice exports to the country, an industry body has said. The Indian Rice Exporters Federation (IREF) noted that exporters are facing payment delays and rising uncertainties due to the situation. This has led to a sharp fall in domestic prices of key basmati varieties over the past week.
Advisory issued
IREF advises caution amid Iranian contract risks
The IREF has advised exporters to reassess risks associated with Iranian contracts and adopt secured payment mechanisms. It has also warned against over-leveraging their inventories meant for the Iranian market. This comes as India exported $468.10 million worth of basmati rice to Iran between April and November in the fiscal year 2025-26, amounting to 5.99 lakh tons, according to trade data.
Market impact
Iranian unrest disrupts trade channels, buyer confidence
Iran has been a major market for Indian basmati rice. However, the ongoing unrest has disrupted trade channels and slowed payments. This has dented buyer confidence, IREF National President Prem Garg said in a statement. He stressed that exporters must be extra cautious about credit exposure and shipment timelines amid these challenges.
Exporter concerns
Importers' inability to honor commitments creates uncertainty
The IREF has highlighted that importers have expressed their inability to honor existing commitments and remit payments to India. This has created uncertainty for exporters. In light of these developments, the federation has issued an advisory urging stakeholders to explore alternative markets in West Asia, Africa, and Europe. The move is aimed at mitigating a potential prolonged slowdown in Iran-bound shipments.
Tariff impact
US tariff concerns and resilience of Indian rice exports
The IREF also addressed concerns over US President Donald Trump's remarks that countries trading with Iran may face a 25% tariff. The federation clarified that Indian rice exports to the US already attract a 50% tariff, increased from 10% earlier. Despite this, Indian rice exports to the US have remained resilient. Between April and November in fiscal year 2025-26, India exported 2,40,518 tons of basmati and non-basmati rice to the US as against 2,35,554 tons in fiscal year 2024-25.