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Indian Express
3 days ago
- Business
- Indian Express
‘Sweet aroma of new opportunities': Basmati exporters eye Middle East, other markets amid US tariff challenge
With most of the over 60 lakh metric tonnes of Basmati exported from India coming from Punjab and Haryana, exporters are worried about the challenges posed by the latest US tariffs and how it would impact the industry. After the newly announced 25 per cent additional tariff, India has now joined Brazil at the top of the list of countries facing the highest import taxes under President Donald Trump's tariff regime. But what if the US tariffs make Indian Basmati uncompetitive? Can other markets absorb this quantity, and where is the demand strongest? According to APEDA, Punjab and Haryana produce around 80 per cent of the country's Basmati, with the former ranking number one. The Basmati grown here also comes under the GI tag, which also leads to high demand abroad. 'Loss of American market need not spell disaster' In the 2024–25 financial year (April–March), India exported around 3.61 LMT of Basmati to the US. Experts said that while recent developments indicate a setback for the country's Basmati exporters after Washington slapped a steep tariff on imports, the US actually accounts for a modest share of India's total aromatic rice trade. 'With strong demand elsewhere, experts say the loss of the American market need not spell disaster—if exporters move swiftly to tap alternative buyers,' said an exporter. The US-bound Basmati could be redirected to West Asian countries like Saudi Arabia, Iran, Iraq, UAE, Yemen, and Oman. The region is already the largest buyer, purchasing around 70 per cent of the exports, with Saudi Arabia, Iran, and Iraq accounting for around 50 per cent of the Basmati exports in 2024–25. By maintaining stricter quality standards, Europe and the UK can also consume some quantities, given the presence of a strong diaspora there. Demand in the domestic Indian market during weddings, festivals, and for luxury consumption is also increasing. 'No doubt the Middle East, which has both the appetite and cultural preference for Indian Basmati, has a huge demand for it. Saudi Arabia alone imported over 11 LMT in 2024-25, so an additional 3–4 LMT across the Middle East region is feasible. But sudden high tariffs by the US require some preparation, and it may hit Basmati exports a bit in the beginning,' said a source with the APEDA. 'Gradually, however, Indian Basmati will find a new place, and US-bound Basmati could be exported to other countries. In 2023–24, India was exporting Basmati to 150 countries, which increased to 154 countries in 2024–25,' the source said, adding that the surplus Basmati can be absorbed, though prices would likely fall to some extent initially, but not for long. 'Actual impact will be smaller' 'Even if the US market is lost due to high tariffs, it will help in adaptability and in creating new markets,' said a member of the All India Rice Exporters Association (AIREA), adding that since America accounts for only 6 per cent of the total exports, the impact is smaller in scale than people might assume. 'Suddenly losing the US market might be a blow in the current scenario, but India's Basmati story does not end there. For exporters willing to diversify and adapt, the sweet aroma of new opportunities is already waiting for them in various countries,' said another exporter. Director of the Punjab Rice Millers and Exporters Association, Ashok Sethi, said US tariffs on Basmati will certainly hit prices because India exports 3–4 lakh tonnes of Basmati to the nation and for this to be consumed by already existing markets, would mean that prices would slip lower. 'Moreover, the Basmati cultivation season is already over in Punjab, and this year around 6.83 lakh hectares are under the crop. Exporters will have to assess the market before purchasing from farmers,' he said.
Hindustan Times
24-06-2025
- Business
- Hindustan Times
Israel-Iran conflict: Miller's worries mount as basmati shipments worth ₹1.5K-cr stuck, payments delayed
As the Israel-Iran conflict enters its second week with no resolution in sight, Indian basmati rice exporters are bearing the brunt. Shipments of nearly 1 lakh tonnes of rice—worth ₹ 1,500 crore—meant for Iran are stranded at ports, and exporters say payments worth twice that amount are currently pending. Currently, paddy is cultivated on approximately 34 lakh acres in Haryana, yielding 68 lakh metric tonnes (MT), including 20 lakh MT of basmati rice. (HT File) Exporters warn that if the situation persists, the impact will not be limited to the industry alone. It could soon trickle down to farmers, especially in the northern states where paddy transplantation is currently underway as part of the ongoing Kharif season. India's top basmati-producing states include Haryana, Punjab, Uttar Pradesh, Madhya Pradesh, Rajasthan and Delhi. Of these, Haryana contributes the largest share—about 35%—according to Haryana Rice Exporters Association president Sushil Jain. Key basmati-producing districts in the state include Karnal, Kurukshetra, Kaithal, Panipat and Sonepat; home to nearly 100 rice mills involved in exports. Currently, paddy is cultivated on approximately 34 lakh acres in Haryana, yielding 68 lakh metric tonnes (MT), including 20 lakh MT of basmati rice. Out of India's 60 lakh MT annual basmati exports, around 10 lakh MT is shipped to Iran, which stands as the second-largest market for Indian basmati after Saudi Arabia. In fact, India exported over 6 million tonnes of basmati in 2024-25—the highest ever—and the industry had been hopeful of setting a new record this year as well. However, the conflict has brought that momentum to a standstill. All India Rice Exporters Association president Satish Goyal said shipments bound for Iran are stuck at Indian ports—mainly Kandla and Mundra in Gujarat—due to a lack of available vessels and insurance. Standard shipping insurance typically does not cover war-related disruptions, making it impossible for exporters to move consignments. Jain echoed the concern and added that Iran's threat to close the Strait of Hormuz could severely impact shipments to other Gulf countries such as Saudi Arabia and Bahrain. He further said the association has been in regular contact with the Agricultural and Processed Food Products Export Development Authority (APEDA), the central government body overseeing agri exports. APEDA has advised exporters to 'wait and watch' for now. A meeting with Union commerce and industry minister Piyush Goyal is scheduled for June 30 to address the crisis and push for a resolution on the stuck shipments and delayed payments. 'The delay and uncertainty are already hurting exporters financially. Domestic prices are also falling. For instance, the rate for the 1718 variety of basmati, which was ₹ 67–68 per kg in early June, has now dipped to ₹ 63,' Jain said.
Mint
23-06-2025
- Business
- Mint
Israel-Iran conflict threatens India's agri exports
NEW DELHI : The escalating conflict between Israel and Iran is clouding the outlook for India's agricultural exports, with experts warning of potential disruptions to trade routes, payments, and shipments, particularly via Iran's Bandar Abbas port, a key gateway for India to Afghanistan and Central Asia. Exporters are also calling for urgent action to scale up the Chabahar Port as a strategic alternative to safeguard India's regional trade links. 'Payment mechanisms—already constrained by US curbs—may tighten further, and heightened security risks in the Gulf could push up insurance premiums and delay shipments," said Ajay Srivastava, a former trade services official and co-founder of the economic think tank Global Trade Research Initiative (GTRI). Also Read: Mint Primer: Oil shock looms as Iran threatens to shut Strait of Hormuz. What it means for India 'Perishable goods like rice, bananas, and tea are particularly at risk," he added. India's exports to Iran stood at $1.24 billion in 2024-25, with basmati rice alone accounting for $753.2 million. Other major exports include bananas ($53.2 million), soybean meal ($70.6 million), bengal gram ($27.9 million), and tea ($25.5 million). However, the risk of a prolonged conflict could choke this trade pipeline. Hit on exports To be sure, Basmati rice exports have already taken a hit. Nearly 100,000 tonnes of basmati shipments bound for Iran are stranded at Indian ports, as exporters have put deliveries on hold amid growing uncertainty. Iran imports nearly one million tonnes of basmati rice from India annually, accounting for about 20% of India's total basmati exports, said Sushil Kumar Jain, vice president, All India Rice Exporters Association. Jain said payment dues of ₹1,500 crore to Indian exporters are stuck amid the ongoing conflict. 'If the conflict persists for a longer period, the exporters may face huge losses, which is difficult to quantify at the moment, but if it settles down in a few days, then we don't see major losses," he added. The conflict's ripple effects are also being felt in the sugar trade. While direct sugar exports to Iran are limited, India routes shipments to Afghanistan through Bandar Abbas due to its fraught trade relations with Pakistan. 'Operations at the port are currently stable, but any escalation could disrupt sugar movement to Afghanistan," said Deepak Ballani, director general, Indian Sugar and Bio-energy Manufacturers Association (ISMA). Also Read: US attack on Iranian nuclear sites roils oil market, India braces for possible price surge Other commodity markets are also on edge. For instance, edible oil prices have jumped $40-50 in just a week, due to supply chain strains and energy cost concerns, according to the Solvent Extractors' Association of India (SEA). Alternative route Meanwhile, rising tensions have prompted experts to underline the growing strategic urgency of scaling up the Chabahar port as India's alternative trade gateway to Afghanistan, Central Asia, and Eurasia. Bandar Abbas, Iran's largest commercial port located on the Strait of Hormuz, is of significant strategic and economic value not just for Iran but also for regional players like India. For India, the port has long served as a key transit point for exporting goods, particularly to landlocked Afghanistan and Central Asia, bypassing Pakistan. The rising tensions may threaten operations in Bandar Abbas, so the Chabahar port is no longer just an option, as it is becoming a strategic imperative for India to connect to Afghanistan, Central Asia, and Eurasia, said Ajay Sahai, director general and CEO of the Federation of Indian Export Organisations (FIEO). 'Rising Israel-Iran tensions reinforce the urgency to operationalize, scale, and integrate Chabahar into India's core trade corridors, which is time and cost-effective," Sahai said. 'India now has an opportunity to shape the future of regional connectivity. Chabahar could emerge not just as a port, but as India's diplomatic and logistical gateway to West and Central Asia," he added. The news agency Press Trust of India on Sunday reported that Indian exporters urged the Centre to shift cargo operations from the Bandar Abbas port to the Chabahar port at a high-level meeting chaired by commerce secretary Sunil Barthwal. Also Read: Mint Explainer | Strait of Hormuz: Will Iran shut the vital oil artery of the world? The meeting brought together senior officials from the ministries of commerce, petroleum, shipping, revenue, and financial services, along with representatives from shipping lines and airport authorities, highlighting the urgency of safeguarding strategic trade corridors, the news agency reported. The spokesperson of the ministry of agriculture and farmers' welfare and the ministry of commerce and industry didn't respond to emailed queries. Challenges ahead However, an immediate diversion of cargo may not be practical due to infrastructure constraints, experts warned. An immediate diversion is not feasible, as the existing infrastructure at Chabahar is inadequate to handle a sudden spike in cargo and container volumes, said Anil Devli, CEO of the Indian National Shipowners' Association (INSA). 'Even roads connecting the port to the nearest highway are not proper, which would make the onward journey both difficult and expensive," Devli said. Despite recent improvements, Chabahar's handling capacity remains modest. The port managed about 80,000 TEUs and three million metric tonnes (MT) of bulk cargo in 2024-25—up from 64,000 TEUs and 2.12 MT in 2023-24, and just 9,000 TEUs and 2.08 MT in 2022-23, according to the data from the ministry of shipping.
Mint
23-06-2025
- Business
- Mint
Indias basmati rice shipments to Iran stuck at ports amid Middle East conflict
New Delhi, Jun 23 (PTI) Around 1,00,000 tonnes of basmati rice destined for Iran are stranded at Indian ports due to the ongoing Israel-Iran conflict, the All India Rice Exporters Association said on Monday. Association president Satish Goyal said around 1,00,000 tonnes of basmati rice meant for Iran is currently stuck at Indian ports, with Iran accounting for 18-20 per cent of India's total basmati rice exports. The shipments are primarily held up at Kandla and Mundra ports in Gujarat, with neither vessels nor insurance available for Iran-bound cargo due to the Middle East conflict, Goyal told PTI. International conflicts are typically not covered under standard shipping insurance policies, leaving exporters unable to dispatch their consignments, he added. The delay in shipments and uncertainty around payments could cause severe financial stress, he said, adding that basmati rice prices in the domestic market have already dropped by ₹ 4-5 per kg. The association is in touch with agri-export promotion body APEDA on the issue. A meeting with Union Commerce and Industry Minister Piyush Goyal is scheduled for June 30 to discuss the crisis, he added. Iran is India's second-largest basmati rice market after Saudi Arabia. India exported around 1 million tonnes of the aromatic grain to Iran during the 2024-25 fiscal year, which ended in March. India exported approximately 6 million tonnes of basmati rice during 2024-25, with demand primarily driven by the Middle East and West Asian markets. Other major buyers include Iraq, the United Arab Emirates and the United States. The Israel-Iran conflict has escalated significantly in recent weeks, with both sides exchanging heavy strikes and the US becoming directly involved in the hostilities. The shipping disruption adds to challenges facing Indian rice exporters, who have previously dealt with payment delays and currency issues in the Iranian market due to international sanctions.
Time of India
23-06-2025
- Business
- Time of India
Middle East conflict stalls 1 lakh tonnes of India's basmati rice exports to Iran
Nearly 1 lakh tonnes of basmati rice shipments bound for Iran have been stranded at Indian ports as the ongoing Israel-Iran conflict disrupts maritime logistics and insurance coverage, according to the All India Rice Exporters Association (AIREA) on Monday. Association president Satish Goyal said consignments amounting to roughly 1,00,000 tonnes, primarily stuck at the Kandla and Mundra ports in Gujarat, cannot be shipped due to a lack of vessels and insurance options for Iran-bound cargo amid escalating tensions in the region. "Iran accounts for 18–20 per cent of India's total basmati rice exports ," Goyal told PTI. With international conflicts not typically covered under standard marine insurance, exporters have been left in limbo, unable to fulfil shipments or secure payments. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Palencia : Qué compañía eléctrica tiene las facturas más baratas? Energía más barata Undo The halt in exports is already rippling into the domestic market. "Prices of basmati rice have dropped by ₹4–₹5 per kg," he said, warning that prolonged disruption could lead to serious financial strain for Indian exporters. The association is currently in discussions with the Agricultural and Processed Food Products Export Development Authority (APEDA) and is scheduled to meet Union Commerce and Industry Minister Piyush Goyal on June 30 to seek intervention and relief measures. Live Events Iran remains India's second-largest market for basmati rice after Saudi Arabia. In the financial year 2024–25, which ended in March, India exported around 1 million tonnes of basmati rice to Iran. India's total basmati exports stood at about 6 million tonnes in 2024–25, with demand largely concentrated in the Middle East and West Asia. Other key buyers include Iraq, the United Arab Emirates, and the United States. With inputs from PTI
