India exported over $1.5 billion of basmati rice and $380 million of non-basmati rice to GCC countries in 2025-26
New Delhi: The growing tensions in West Asia, especially involving Iran, have started affecting India’s agricultural exports. One of the sectors having the impact is the rice export industry, particularly basmati rice. India is the world’s largest exporter of basmati rice, and many countries in the Middle East depend heavily on it.
However, the ongoing conflict has disrupted shipping routes and increased transportation costs. Freight rates and insurance premiums have gone up because ships traveling through the region now face higher security risks. Because of these difficulties, rice exporters in India are asking the government to provide support and relief.
Middle East Is a Major Market
Countries in West Asia are among the biggest buyers of Indian rice. Iran, Iraq, Saudi Arabia, the United Arab Emirates, and Yemen import large amounts of basmati rice from India every year.
Iran accounts for around 15–20% of India’s basmati rice exports, while Iraq makes up around 14–18%. Together, these two countries import more than two million tonnes of rice from India every year, worth over $2 billion.
Other Gulf Cooperation Council (GCC) countries also buy a large quantity of Indian rice. Between April 2025 and January 2026, India exported more than $1.5 billion worth of basmati rice and around $380 million worth of non-basmati rice to GCC nations.
Since the Middle East is such an important market, any instability in the region directly affects India’s rice exporters and farmers.
Shipping Routes Become Risky
The conflict has created serious concerns about shipping routes. Most ships carrying Indian rice to the Gulf region pass through the Strait of Hormuz, which is one of the world’s most important shipping routes.
Because of rising military tensions and security threats in the region, many shipping companies have become cautious. Some ships are avoiding the route or moving more slowly due to safety concerns.
Also Read: US-Israel vs Iran War Day 6: Here’s What Has Happened So Far
Warnings about possible attacks and military activities have also reduced ship movement in the area. This situation has made it difficult for exporters to send rice shipments to Middle Eastern countries on time.
Freight and Insurance Costs Increase
The crisis has also pushed shipping costs higher. Industry estimates say international freight rates for shipments to Gulf countries have increased by about 15 to 20%.
Shipping companies have also added war-risk surcharges because vessels traveling through conflict zones face greater danger.
Insurance companies have increased their premiums as well. Exporters now have to pay higher insurance charges to protect cargo that passes through risky waters.
At the same time, the cost of bunker fuel used by ships has risen from about $520 per tonne to nearly $580 per tonne, which has further increased shipping expenses.
All these factors have made exporting rice more expensive for Indian traders.
Large Quantity of Rice Stuck
The conflict has also slowed down shipments. Reports suggest that about 400,000 tonnes of Indian basmati rice are currently stuck either in transit or waiting at ports.
According to industry officials, nearly half of this rice has already been loaded onto ships but is moving slowly because vessels are facing security concerns in the region.
The remaining quantity is still waiting at Indian ports because exporters are finding it difficult to get ships willing to travel through risky areas.
These delays are creating financial problems. Exporters have to continue paying storage costs, logistics expenses, and bank interest while their cargo remains stuck.
Domestic Rice Prices Fall
While shipping costs are increasing internationally, the slowdown in exports has caused domestic basmati rice prices in India to fall.
When exporters cannot send rice overseas, the unsold stock stays in warehouses and local markets. This increases supply in the domestic market.
As a result, basmati rice prices in India have dropped by around 5 to 10% in recent days.
The price drop has added to the financial pressure on exporters who are already struggling with higher freight charges and delayed shipments.
Exporters Request Government Help
Because of these problems, rice exporters have asked the Indian government to provide support.
Industry groups have suggested several measures that could help exporters manage rising costs. These include possible financial assistance or relief to offset higher freight and insurance charges.
Trade associations have also advised exporters to change the way they sign shipping contracts. They recommend avoiding Cost, Insurance, and Freight (CIF) agreements for shipments to high-risk destinations like Iran and some Gulf countries.
Instead, they suggest using Free on Board (FOB) contracts, where the buyer takes responsibility for freight and insurance costs. This approach could reduce the financial risk for exporters during uncertain times.
Possible Wider Economic Impact
Experts believe that the conflict could affect other sectors of India’s economy as well if tensions continue.
The Middle East is an important market not only for rice but also for many other Indian exports such as fruits, vegetables, and spices.
If the conflict continues or becomes more serious, oil prices may rise and shipping routes could face more disruptions. This would increase global transportation costs.
Low-value but high-volume exports like rice are especially vulnerable because transportation costs make up a large portion of their total price.
Uncertainty for the Rice Industry
The ongoing tensions in West Asia show how global conflicts can quickly affect international trade. For India’s rice industry, the crisis has already led to higher shipping costs, delayed cargo, and falling domestic prices.
Since the Middle East is one of the biggest markets for Indian basmati rice, a long-lasting conflict could create serious challenges for exporters, farmers, and the agricultural sector.
Exporters hope that government support and an improvement in the regional situation will help restore normal trade operations soon.
khushisikarwar is an award-winning journalist and content creator who thrives on telling stories that matter. As a key contributor to Newsisland, [she] focus on cultural commentary, providing readers with thought-provoking insights.
