Iran Crisis Hits Indian Basmati Exports: ₹2,000 Crore at Risk Amid Payment Delays

Ongoing unrest in Iran has dealt a severe blow to India’s Basmati rice exports. Disruptions in trade and payment delays have put approximately ₹2,000 crore of Indian exporters’ revenue at risk, with Basmati rice prices potentially falling by 30–40%. The situation has been further exacerbated by Iran’s depreciating currency and new U.S. tariffs on Iranian trade.

Export Disruptions and Stockpile Concerns
In the past week alone, Basmati rice prices have declined by ₹5–7 per kilogram. Iran is India’s second-largest buyer of Basmati rice, importing nearly $75 million worth from India last year. Due to the unrest, communication channels have broken down, leaving payments stuck. Consequently, rice shipments are piling up at Iranian ports and India’s Mundra port. India has seen a bumper rice harvest this year, making the stockpile an added challenge for exporters.

Sharp Price Decline Expected
The India Rice Exporters Federation (IREF) has expressed deep concern. It warned that if the crisis continues, Basmati rice prices could drop by 30–40%, a scenario previously observed during Iran-related trade disruptions. Payment uncertainties and delays in customs clearance have forced exporters to halt shipments at ports, affecting farmers, mill owners, and exporters in Punjab and Haryana. The federation cautioned that this could negatively impact India’s Basmati rice export performance for the current fiscal year.

Currency Collapse Adds Pressure
Iran’s rapidly depreciating rial is compounding the problem. Violent protests against the current government, combined with U.S. President Donald Trump’s imposition of a 25% tariff on Iranian trade, have created additional hurdles. The rial has reached record lows, with one U.S. dollar now costing nearly 1.3 million rials. This has directly impacted India’s Basmati rice exports.

Iran imports around 1.2 million tonnes of Basmati rice annually, making it India’s second-largest buyer after Saudi Arabia. The IREF reported that soaring inflation and acute foreign currency shortages have forced the Iranian government to cut subsidies on food imports, causing Iranian buyers to struggle with payments. Indian exporters have consequently stopped dispatching new shipments.

Potential Supply Chain Disruptions
The federation warned that ongoing difficulties in accessing foreign currency in Iran are delaying payments to Indian exporters, putting their funds at risk. Reduced demand for exports could put further pressure on rice prices. Punjab and Haryana farmers, already grappling with flood-related challenges, may face additional financial stress due to declining export demand. Small and medium exporters, who have availed of government-subsidized loans, could face liquidity issues, with payments worth ₹1,500–2,000 crore at risk.

In short: The crisis in Iran is not just geopolitical—it has real economic consequences for India’s Basmati rice sector, threatening prices, supply chains, and the livelihoods of farmers and exporters alike.