Gulf War Disrupts India’s Basmati Trade

• Rising US–Israel–Iran tensions disrupt India’s basmati rice exports
• Nearly 4 lakh tonnes of shipments stranded at ports or in transit
• Domestic basmati prices fall by up to ₹1,000 per quintal
• Exporters face higher freight costs and war-risk surcharges

GG News Bureau
New Delhi, 6th March: Rising geopolitical tensions between the United States, Israel and Iran are beginning to impact India’s agricultural export economy, with the basmati rice trade among the first sectors to feel the pressure.

Export activity has slowed sharply as uncertainty over shipping routes, war-risk surcharges and disruptions in maritime trade channels have stalled the movement of consignments.

Industry estimates indicate that nearly 4 lakh tonnes of basmati rice shipments are currently stranded either in transit or at international ports, creating a chain reaction affecting exporters, millers and farmers.

India is the world’s largest exporter of basmati rice, with the Middle East accounting for a major share of the market. Countries such as Iran, Saudi Arabia, Iraq, the United Arab Emirates and Yemen together account for nearly half of India’s basmati exports.

The sudden disruption in trade has already begun affecting domestic markets. Traders in major rice mandis reported a sharp fall in basmati prices, with rates declining by up to ₹1,000 per quintal in recent days.

Several popular varieties including Basmati Sela 1509, Basmati 1121, Sugandha and Sharbati have been affected as shipping companies introduce war-risk surcharges and alter delivery routes.

The impact is also being felt in major rice-producing regions such as Madhya Pradesh. Districts like Raisen and Narmadapuram, known for exporting significant quantities of basmati rice, have witnessed a sudden slowdown in export orders.

Sachin Verma, President of the Aparna Food Mills Association in Raisen, said the conflict has created unprecedented uncertainty in the export market.

“The price of exported basmati rice has effectively increased by ₹8 to ₹10 per kilogram due to added charges. In many cases, shipping companies have diverted consignments to alternate ports instead of the original destinations, which is further increasing costs and delaying deliveries,” he said.

Pranjal Malani, a trader associated with the rice export industry, said the disruption is already causing serious operational challenges.

“Nearly 4 lakh metric tonnes of basmati are stuck at ports or in transit, delaying payments and creating financial stress for traders. Container costs that were earlier around $1,800 have risen to nearly $3,800, which is putting additional pressure on exporters,” he said.

Malani added that even shipments that have reached destination ports are facing delays as buyers are hesitant to take delivery due to the uncertain geopolitical situation.

However, some industry representatives believe the crisis may be temporary. Ajay Bhalotia, General Secretary of the All India Rice Exporters Association, said that although shipments are delayed, most consignments are expected to eventually reach their destinations.

He added that if tensions in the region ease, demand from key markets such as Iran could recover quickly once shipping routes stabilise.