The escalating conflict involving the United States, Israel and Iran has dealt a severe blow to India’s basmati rice exports, the majority of which are destined for the Middle East. With export routes disrupted and shipments stalled, traders warn that domestic basmati prices could come under pressure in the coming weeks. Non-basmati rice exports to African markets may also be affected due to logistical disruptions.
India exports around 6 million tonnes of basmati rice annually, nearly 70% of which - about 4 to 4.2 million tonnes - is shipped to the Middle East. Iran alone accounts for 600,000 to 700,000 tonnes of India’s annual basmati exports. In peak years, exports to Iran have touched as high as 1.4 million tonnes. However, the ongoing conflict has brought shipments to Iran and much of the Middle East to a near standstill.
Although India’s overall trade with Iran remains limited due to long-standing US sanctions, restrictions on banking channels, shipping and energy trade have continued to complicate transactions. Rice constitutes more than half of India’s exports to Iran. In calendar year 2025, India exported goods worth approximately $1.24 billion to Iran, of which rice accounted for $747 million.
According to the All India Rice Exporters Association, India exported 6.065 million tonnes of basmati rice in FY 2024-25, valued at ₹50,312 crore (approximately $5.94 billion). Total rice production during the year stood at 150.1 million tonnes, with basmati accounting for 7 to 7.5 million tonnes. Non-basmati rice exports during the same period ranged between 14 and 15.1 million tonnes.
Data from the Commerce Ministry’s Niryat portal show that Iran accounted for 6.07% of India’s total rice exports in 2024-25. Saudi Arabia was the largest importer, with a 10.61% share of India’s total rice exports valued at $12.47 billion. It was followed by Benin (8.26%), Iraq (6.94%) and the United Arab Emirates (4.06%).
On the import side, India purchased goods worth $408.6 million from Iran, including petroleum coke ($135.7 million), apples ($71.5 million) and dates ($33.3 million).
Exporters estimate that between 150,000 and 200,000 tonnes of basmati rice are currently stranded at various Indian ports, with a similar quantity in transit. The timing is particularly critical, as exports to the Gulf typically peak during Ramadan due to heightened demand.
The immediate economic impact of the conflict is being felt through disruptions in the Strait of Hormuz, a key maritime route for global trade. A substantial portion of India’s crude oil and LNG imports passes through this corridor. Any prolonged disruption is likely to raise freight charges and insurance premiums, while higher crude oil prices could further fuel domestic inflationary pressures.