Iran-bound basmati rice exports hit a wal

By Admin

24 Jun, 2025

India’s basmati rice export industry is facing one of its most significant disruptions in recent years as nearly one lakh tonnes of rice shipments bound for Iran remain stranded at major Indian ports. The All India Rice Exporters Association (AIREA) has flagged this crisis, citing the ongoing Iran-Israel conflict as the primary reason behind the shipping halt.

Massive Shipment Backlog at Ports

According to AIREA President Satish Goyal, around 100,000 tonnes of basmati rice, primarily stuck at the Kandla and Mundra ports in Gujarat, are unable to sail due to a severe shortage of vessels and the suspension of marine insurance coverage. “Iran accounts for nearly 18–20% of India’s total basmati exports,” Goyal stated, emphasizing the gravity of the disruption. With international conflicts excluded from standard marine insurance policies, exporters are finding it impossible to dispatch cargo or secure payments.

Haryana Bears the Brunt

The northern state of Haryana, a major contributor to India’s basmati exports to Tehran, is experiencing a disproportionate impact. Karnal known as the hub of India’s basmati rice trade along with Kaithal and Sonipat, has seen significant shipping delays and a buildup of payment backlogs. Sushil Jain, president of the Haryana chapter of the Rice Exporters Association, noted that nearly 30–35% of India’s basmati rice exports to Iran originate from Haryana, translating to nearly 3 lakh metric tonnes annually.

Financial Hit and Falling Prices

The financial toll is becoming increasingly evident. Jain disclosed that payments for approximately 2 lakh metric tonnes of rice, valued between ₹1,500 crore and ₹2,000 crore, are currently frozen due to the geopolitical situation. Domestically, the prices of basmati rice have already declined by ₹4–₹5 per kg. A prolonged disruption could result in more significant losses, pushing many exporters into financial distress.

Lack of Insurance Coverage Worsens Crisis

One of the most pressing concerns is the lack of insurance for maritime shipments during wartime. Exporters are reluctant to take the risk of dispatching consignments without adequate insurance, further stalling trade. Jain highlighted that this could have a cascading effect on the broader Indian market, especially with the fall in prices already taking a toll on producer margins.

Appeal for Government Intervention

In response to the ongoing crisis, AIREA is actively engaging with the Agricultural and Processed Food Products Export Development Authority (APEDA). A high-level meeting with Union Commerce and Industry Minister Piyush Goyal has been scheduled for June 30 to discuss potential relief measures and policy support for affected exporters.

Strategic Importance of the Iran Market

Iran is India’s second-largest market for basmati rice, following Saudi Arabia. In FY24, India exported nearly 1 million tonnes of basmati rice to Iran, accounting for a significant portion of the country’s total basmati exports, which stood at 6 million tonnes. Other key markets include Iraq, the United Arab Emirates, and the United States.

Looking Ahead

The crisis has exposed the vulnerability of India’s agricultural exports to geopolitical shocks and underlines the urgent need for contingency frameworks, including wartime insurance coverage and diversified trade routes. Unless the situation in the Middle East stabilizes soon, Indian exporters may continue to suffer severe losses, and the ripple effects may extend well into the domestic economy.