Iran-Israel war grounds 100,000 tonnes of Indian Basmati rice

New Delhi: The escalating war between Israel and Iran is sending ripples far beyond the Middle East, significantly impacting the Indian basmati rice export market. A staggering 100,000 tonnes of basmati rice, destined for Iran, is currently stranded at Indian ports, a direct consequence of the heightened geopolitical tensions, according to the All India Rice Exporters Association (AIREA).

This represents a substantial 18-20 per cent of India’s total basmati exports to Iran, its second-largest market after Saudi Arabia. During the 2024-25 fiscal year, India exported approximately 1 million tonnes of basmati rice to Iran.

The shipment backlog is concentrated at Kandla and Mundra ports in Gujarat. The primary obstacle is the unavailability of shipping vessels and insurance coverage for Iran-bound shipments, directly attributed to the volatile security situation in the Middle East, as confirmed by AIREA president Satish Goyal. Standard international shipping insurance policies typically exclude coverage during periods of active international conflict, leaving exporters in a precarious position, unable to move their valuable cargo.

This standstill is creating significant financial distress for Indian exporters. The uncertainty surrounding shipping and payments has already led to a decrease in domestic basmati rice prices, with a reported drop of Rs 4-5 per kilogram. The situation is further complicated by existing challenges, including delayed payments and currency-related issues stemming from international sanctions against Iran.

The AIREA is actively engaged in addressing this crisis. They are in close communication with the Agricultural and Processed Food Products Export Development Authority (APEDA) and have scheduled a crucial meeting with Union Commerce and Industry Minister Piyush Goyal on June 30th to discuss potential solutions. The urgency stems from the broader context of India’s basmati rice exports, which totalled approximately 6 million tonnes in 2024-25, with a significant portion going to the Middle East and West Asia, including key markets like Iraq, the UAE, and the USA.