Iran-Israel Conflict Threatens Indian Basmati Rice Exports, Raises Payment Fears
NEW DELHI, India—June 23, 2025: The escalating conflict between Iran and Israel has caused immense disruption for India’s basmati rice exporters, with major shipping delays and fears of payment defaults. Approximately 100,000 tons of basmati rice bound for Iran remain stranded at Indian ports, mainly Gujarat, affecting the most vital segment of India’s agricultural exports.
Stopped Shipments; Falling Prices
AIREA confirmed that the gigantic shipments are stuck at Kandla and Mundra ports due to a lack of vessels and insurance coverage for Iran-bound cargo. This already impacted ₹4-₹5 down from the domestic basmati rice price, which has put exporters under pressure. A serious impediment continues to be the absence of war-risk insurance for vessels sailing through the conflict zone.
Iran—A Major Market:
After Saudi Arabia, Iran is the second-largest basmati rice market for India, accounting for 18 to 20% of India’s total basmati exports. The exports to Iran amount to nearly 1 million tons in FY 2024-25. Under such enormous trade relations as exist hitherto, there have never been unprecedented challenges.
Consequences on Wider Economies
The flare-up in hostilities across the region, including US-led strikes on Iranian nuclear sites, has raised concerns for maritime safety all the more. The potential disruption of critical shipping lanes such as the Strait of Hormuz looms large as a threat across the spectrum of global trade and energy security. In this case, India further finds itself encumbered with prevailing challenges: delays in payments and currency conversion problems with Iran, which arise out of international sanctions.
Exporters Demand Relief
AIREA has begun talks with the Agricultural and Processed Food Products Export Development Authority (APEDA), and a meeting has been set on June 30 to discuss this with Union Commerce and Industry Minister Piyush Goyal. Exporters have requested prompt intervention from the government to mitigate the crisis and find a way to obtain payment for the stranded goods. Among the options for proposed assistance are diplomatic channels, government-backed insurance, or financial indemnity.
Call for De-escalation
The Indian government has voiced its serious concerns over escalating tensions. On Sunday, Prime Minister Narendra Modi expressed India’s “deep concern” to Iranian President Masoud Pezeshkian, urging immediate de-escalation through dialogue and diplomacy. If the simulated conflict continues, it surely threatens severe financial problems for hundreds of Indian rice exporters who have heavily invested in their consignments.
