Middle East Tensions Disrupt India’s Basmati Exports—1 Lakh Tonnes In Limbo

India's basmati rice exports to Iran have come to a grinding halt as the escalating Israel-Iran conflict disrupts shipping operations. Nearly 1 lakh tonnes of rice intended for Iran are currently stranded at Indian ports, with exporters facing mounting losses due to unavailable vessels and insurance coverage.

Key Ports Facing Delays

The bulk of the basmati shipments are held up at Gujarat's Kandla and Mundra ports. Exporters are unable to dispatch consignments, as shipping companies are unwilling to send vessels to Iran amidst the ongoing conflict. According to All India Rice Exporters Association President Satish Goyal, regular shipping insurance policies do not cover disruptions caused by international conflicts-leaving exporters without viable options.

Impact on Market and Exporters

This delay has caused significant financial stress for exporters and raised concerns about payments. The uncertainty has also pushed domestic basmati prices down by ₹4-₹5 per kilogram in local markets, further compounding the industry's problems.

Iran: A Crucial Buyer for India

Iran is India's second-largest importer of basmati rice after Saudi Arabia. In FY 2024-25, India exported nearly 1 million tonnes of basmati to Iran, which accounts for roughly 18-20% of India's total basmati rice exports.

Broader Export Landscape

Overall, India exported around 6 million tonnes of basmati rice in FY 2024-25. Major buyers include nations in the Middle East and West Asia such as Saudi Arabia, Iraq, UAE, and the United States.

Seeking Government Intervention

The exporters' association has reached out to the Agricultural and Processed Food Products Export Development Authority (APEDA) and is scheduled to meet Union Commerce and Industry Minister Piyush Goyal on June 30. The meeting is expected to focus on resolving logistical hurdles and facilitating smoother export flows.

Persistent Issues with Iran

Exporters point out that even before the Israel-Iran conflict erupted, trade with Iran was complicated by delayed payments and currency conversion challenges due to ongoing international sanctions. The current geopolitical tensions have only worsened an already fragile trade relationship.

(With PTI inputs)