India’s agricultural exporters were not expecting a war. But the US-Israel strikes on Iran have landed directly on two of India’s most valuable export commodities, basmati rice and tea.
Iran and Iraq: India’s Biggest Rice Buyers
Iran is India’s single largest basmati rice market. It accounts for 25 percent of India’s total basmati exports. Iraq takes another 20 percent. Together, these two countries import over 2 million tonnes of Indian basmati rice annually, valued at over $2 billion. Last year, India exported $1.2 billion worth of basmati rice to Iran alone.
Iranian importers had placed large advance orders for basmati in the two months before the conflict began. Those shipments are now in doubt. Domestic basmati prices in India have already risen by approximately Rs 10 per kilogram as supply uncertainty hits local markets.
Freight and Insurance Add to the Damage
With the Strait of Hormuz under threat and shipping insurance costs up 50 percent overnight, even orders that were placed and confirmed face new complications. Freight costs are rising. Vessels are hesitant. Delivery timelines are no longer reliable.
The disruption is not limited to Iran. The uncertainty surrounding the conflict will impact rice export pipelines across Central Asia, where Iran serves as a key transit and trading corridor.
Tea Exports Also at Risk
Tea exports face similar pressure. India exported tea worth about Rs 7 billion to Iran in 2024-25. Iranian buyers are now in a difficult position, unable to move money freely, unable to guarantee port access, and operating under the shadow of an active military conflict.
Two countries at the centre of this conflict together absorb nearly half of India’s basmati rice exports by volume. A prolonged war does not just slow those exports, it redirects Indian farmers, traders, and exporters toward finding alternative markets at lower prices and with higher logistics costs.
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