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Iran in turmoil, Trump threatens 25% tariffs- could India’s prized basmati rice face a major export crisis? Prices are tumbling, payments delayed, and exporters are bracing for unexpected shocks. Read the article to know the full story…
Iran turmoil and Trump’s tariffs trigger a Basmati crisis in India
New Delhi: India’s basmati rice trade is facing fresh headwinds as political unrest in Iran coincides with a tough new tariff warning from US President Donald Trump. Together, these developments are creating uncertainty for exporters, disrupting payments, and pushing domestic basmati prices lower.
Iran has traditionally been one of the largest and most reliable overseas buyers of Indian basmati rice. During April-November of the current fiscal year (2025-26), India exported basmati rice worth about $468 million to Iran, amounting to nearly 6 lakh metric tonnes. However, rising internal turmoil and widespread protests in the country are now affecting trade execution.
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According to the Indian Rice Exporters Federation (IREF), instability in Iran has slowed remittances, delayed shipments, and weakened buyer confidence. Importers are reportedly struggling to honour contracts and transfer payments, forcing Indian exporters to reassess risks.
These challenges have already begun to reflect in domestic markets, where basmati prices have dropped sharply over the past week due to cautious buying and postponed deals.
The uncertainty surrounding Iranian demand has created a ripple effect across India’s rice trade. Exporters are holding back on fresh contracts, while traders are avoiding inventory build-up linked heavily to Iran. As a result, major basmati varieties have seen noticeable price corrections in mandis.
IREF has advised exporters to strengthen payment safeguards, closely monitor credit exposure, and diversify markets to reduce dependence on Iran. The federation has also encouraged expansion into alternative destinations across West Asia, Africa, and Europe.
Adding to the complexity, Donald Trump recently announced that any country trading with Iran could face a blanket 25% tariff on all business with the US. While the exact implementation remains unclear, the statement has raised concerns across global trade circles.
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IREF noted that Indian rice exports to the US are already subject to steep duties of around 50%, up from 10% earlier. Despite this, shipments to the US have remained stable, largely because Indian basmati has a distinct consumer base and limited substitutes. The US remains the fourth-largest destination for Indian basmati rice.
While US-bound exports appear resilient, risks from Iran are seen as more immediate and severe. With payments under stress and market confidence shaken, exporters are being urged to proceed carefully. Industry experts believe timely risk management and market diversification will be crucial to protecting farmers and exporters amid rising geopolitical uncertainty.
