The growing uncertainty surrounding the Israel-US attack on Iran has already begun impacting India's economic interests in West Asia.
While crude oil prices have risen in the international market, exporters are under pressure due to increasing uncertainty in Iran, the largest market for Indian basmati rice.
Ajay Bhalotia, director of Fortune Rice Limited and general secretary of the All India Rice Exporters Association, told NDTV that Iranian importers had placed orders for large quantities of basmati rice from India in the past two months before the war began. Consequently, the price of basmati rice in the local Indian markets had risen by approximately Rs 10/kg.
"Since the war began, Indian basmati rice exports have virtually halted. A shipment of basmati rice exported from India to Iran is currently in transit. There is considerable uncertainty about whether Iranian importers will be able to take delivery of this basmati rice in the current environment," Bhalotia said.
According to the All India Rice Exporters Association:
- One-fourth, or 25%, of India's total basmati rice exports are to Iran, while 20% are to Iraq.
- Together, these exports amount to over 2 million tonnes of basmati rice, valued at over $2 billion.
- Last year, India exported a total of $1.2 billion worth of basmati rice to Iran.
- Basmati rice exports to Iraq will also be affected due to the conflict.
- The uncertainty surrounding the war in Iran will impact rice exports throughout Central Asia.
There is a possibility that tea exports from India to Iran will also take a hit. In 2024-25, tea worth approximately Rs 7 billion was exported from India to the country.
Even before the war, the ongoing political uncertainty and internal conflict in Iran had already started to have an effect on India's exports. Last month, the US had announced an additional 25% tariff on countries trading with Iran. Due to all this, the value of Iran's currency, the Rial, depreciated by 50%, which had already significantly reduced the purchasing power of ordinary people in Iran.
