The export of Indian basmati rice to Iran has been suspended, and an estimated 100,000 tonnes are now stuck in major ports in the west. The All India Rice Exporters Association (AIREA) confirmed the situation on Monday, attributing it to rising tensions in the Middle East.
According to Satish Goyal, the president of AIREA, the consignments are being detained at Kandla and Mundra ports, located in the state of Gujarat. The interference is made possible by a shortage of shipping channels and the lack of insurance for shipments to Iran. Continuous fights between Israel and Iran have led to the cancellation of insurance covers, and this has had a significant impact on how cargo is transported.
To protect the goods during transit, exporters use a broad marine insurance policy. Nevertheless, regular insurance coverage does not protect against international conflict situations, exposing shipments to high risks and logistical stagnation.
Export delay has started to affect the prices of rice in the country. According to AIREA, the prices of basmati have already fallen by 4-5 rupees per kg in Indian markets due to excess supply. There is considerable financial pressure on traders and exporters, and a delay in payments is further exacerbating it.
Iran is still one of the major markets for Indian basmati rice. India shipped approximately 1 million tonnes of the aromatic grain to Iran in 2024-25, which placed Iran as the second-largest destination, next to Saudi Arabia. Iran is typically the primary recipient of basmati exports from India, with nearly 20 percent of basmati rice being exported to Iran.
During the same period, India exported approximately 6 million tonnes of basmati rice to the international market. The most significant part of this demand is stimulated by the Middle East and West Asia, Iraq, the UAE, and the United States are also major importers.
In addressing the issue, AIREA is collaborating with the Agricultural and Processed Food Products Export Development Authority (APEDA). A review of the situation and identification of possible interventions are to be conducted through a meeting scheduled with Union Commerce and Industry Minister Piyush Goyal on June 30.
The situation that the Indian exporters in Iran deal with has generated broader issues for these exporters. These comprise past problems in currency exchange controls and the settlement of payments, mainly catalyzed by foreign sanctions against Iran.
Stakeholders fear a prolonged interruption to trading should existing geopolitical tensions escalate further. The exporters have lobbied the government to consider alternative insurance covers or diplomatic measures to ensure the safe export of agricultural commodities to Iran.