Indian Rice Exporters Federation (IREF) has attributed the sharp decline in Basmati rice prices to the escalating civil unrest and widespread protests in Iran, creating uncertainty across trade channels and triggering a sharp softening of Basmati rice prices in the domestic market.
IREF, in a statement, noted, “According to the latest export data, India’s Basmati rice exports to Iran during April– November 2025–26 stood at USD 468.10 million, with volumes reaching 5.99 lakh metric tonnes.
“While Iran continues to be one of India’s most significant destinations for Basmati rice, the current financial year has seen growing stress on order flows, payment cycles, and shipment schedules due to the prevailing instability in the country.
“The impact is now clearly visible in domestic mandis. Over the past week alone, prices of key Basmati varieties have registered a steep decline, reflecting buyer hesitation, delayed contracts, and heightened risk perception among exporters.
Commenting on the situation, Dr. Prem Garg, National President, Indian Rice Exporters Federation (IREF), said:
“Iran has historically been a pillar market for Indian Basmati. However, the current internal turmoil has disrupted trade channels, slowed payments, and dented buyer confidence.
“The immediate fallout is evident in Indian mandis, where Basmati prices have softened sharply within days. Exporters must exercise heightened caution, particularly with respect to credit exposure and shipment timelines.”
Mr Dev Garg, Vice President of IREF, added that IREF has issued an advisory urging exporters to reassess risk associated with Iranian contracts, adopt secured payment mechanisms, and avoid overleveraging inventories meant exclusively for the Iran market.
“We are not sounding an alarm, but urging prudence. In periods of geopolitical and internal instability, trade is often the first casualty. A calibrated approach is essential to protect both exporters and farmers.
“India’s rice sector is resilient, but it must be safeguarded through timely intelligence and responsible trade practices,” he said.
IREF has also appealed to stakeholders to diversify into alternative markets across West Asia, Africa, and Europe to cushion the impact of any prolonged slowdown in Iran-bound shipments.
It also took note of the recent statement by the President of the United States indicating that countries continuing trade with the Islamic Republic of Iran may be subjected to a 25 per cent tariff.
In this context, IREF clarified that Indian rice exports to the U.S. are already subject to a 50 per cent tariff, a sharp increase from the earlier duty level of 10 per cent.
“Despite this substantial tariff escalation, Indian rice exports to the U.S. have not witnessed a corresponding decline in volume. This resilience is largely due to the fact that Indian rice— particularly Basmati—is not a like-for-like substitutefor rice of Pakistani or U.S. origin.
“Additionally, Indian rice is deeply embedded in the culinary traditions of the Gulf region and the Indian subcontinent diaspora, ensuring sustained consumer demand despite price pressures.
“At present, there is limited clarity on whether the proposed 25 per cent tariff would be levied over and above the existing 50 per cent duty or applied differently.
“Even if the tariff burden were to rise further, the Federation does not foresee a significant decline in Indian rice exports to the U.S. market.
“The United States remains the 10th largest market for Indian rice globally and the fourth largest destination for Indian Basmati, underscoring its strategic importance.”
IREF, however, expressed greater concern over developments within Iran, where disruptions originating in local bazaars have begun to affect trade settlements.
According to the Federation, importers have conveyed their inability to honour existing commitments and remit payments to India, creating heightened uncertainty for exporters.
“While similar crises have occurred in the past, the trajectory of the current situation remains unclear and is expected to cause further disturbances in prices, liquidity, and trade sentiment in the weeks ahead.
“As global trade becomes increasingly intertwined with geopolitics, the situation in Iran serves as a reminder that food exports—particularly strategic commodities such as rice—are highly sensitive to regional stability. For India’s rice ecosystem, timely caution today may help prevent deeper distress tomorrow.”
© NAN