Iran unrest hits Indian basmati rice exports as domestic prices fall sharply amid payment delays

Civil unrest in Iran has begun to disrupt India’s basmati rice exports, triggering a sharp decline in domestic prices as exporters face delayed payments and mounting uncertainties, the Indian Rice Exporters Federation (IREF) said on Tuesday.

India exported basmati rice worth USD 468.10 million to Iran during April–November of the 2025–26 fiscal, totaling 5.99 lakh tonnes. Iran remains India’s largest basmati market, but the current financial year has seen growing stress on order flows, payment cycles, and shipments due to instability. Over the past week, domestic prices of key varieties have fallen sharply. The prices of basmati rice varieties fell on Monday, with the 1121 variety dropping from Rs 85 per kg to Rs 80 per kg, while the 1509 and 1718 varieties declined from Rs 70 per kg to Rs 65 per kg, reflecting buyer hesitation and heightened risk perception. The numbers 1121, 1509, and 1718 represent different types of basmati rice, distinguished by grain length, aroma, and cooking quality, and are widely used as benchmarks in the wholesale market.

“Iran has historically been a pillar market for Indian basmati. However, the current turmoil has disrupted trade channels, slowed payments, and dented buyer confidence,” IREF National President Prem Garg said. Importers have indicated their inability to honour commitments, creating uncertainty for exporters.

The federation has advised exporters to reassess Iran-bound contracts, adopt secured payment mechanisms, and avoid over-leveraging inventories , while also urging diversification into alternative markets across West Asia, Africa, and Europe . Garg added that exporters must exercise prudence regarding credit exposure and shipment timelines to protect both farmers and businesses.

US tariff concerns

Recent remarks by US President Donald Trump, suggesting that countries continuing trade with Iran could face a 25 per cent tariff on US trade , have added to the uncertainty. Indian rice exports to the US already attract a 50 per cent duty. While the impact of an additional levy remains unclear, IREF noted that it does not expect a significant drop in exports due to basmati’s unique global positioning. However, the tariff threat underscores broader geopolitical risks that can influence trade confidence, financing, and pricing .

While the trajectory of Iran’s unrest remains uncertain, the combined effect of payment delays, buyer hesitation, and geopolitical risk is expected to continue influencing domestic prices and export sentiment in the weeks ahead. IREF’s advisory encourages a calibrated, risk-aware approach to safeguard both the interests of exporters and farmers.