Basmati Rice Exporters Concerned About Shipment Delays and Payment Issues with Iran
Concerns Grow Among Indian Basmati Rice Exporters Over Iran Shipments Amid Escalating Conflict
Exporters of Indian Basmati rice are expressing increasing alarm regarding delays in shipments and payment issues to Iran, a key market with historical significance, which have arisen due to the rising tensions in the Israel-Iran conflict. There are worries that if the situation deteriorates further, it could adversely affect Basmati prices and demand, despite India’s position as the leading rice exporter globally.
Iran has consistently ranked among the top destinations for Basmati rice, alongside countries like Saudi Arabia, Iraq, and the United Arab Emirates. A prominent rice exporter from Haryana, speaking on condition of anonymity, stated, “The process of securing payments for Basmati rice exports to Iran is quite complicated.” Sources indicate that Iranian importers are currently using traders’ accounts in Dubai and other alternative methods to settle payments. Exporters are hoping for a diplomatic resolution to ease the tension and have called on the Indian government to consider secure trading mechanisms, such as transactions in rupees and rials or banking guarantees, to protect their financial interests.
As it stands, payment delays in the private sector range from 6 to 8 months, while transactions involving Iranian governmental bodies—such as the Government Trading Corporation of Iran (GTC), Iran Trading Company (Itka), Ministry of Agriculture Jihad (MAJ), and Ministry of Industry, Mine and Trade (MIMT)—can take between 90 to 180 days. Ranjit Singh Jossan, vice president of the Basmati Rice Millers & Exporters Association in Punjab, highlighted, “Iran was at one point the largest importer of Indian Basmati rice, but trade has been severely impacted over the years due to geopolitical factors, particularly US sanctions.”
According to data from the commerce ministry, in the fiscal year 2022, Iran accounted for approximately 23% of India’s total Basmati rice exports, valued at $0.81 billion out of a total of $3.54 billion. However, by FY25, its contribution dropped to 12%, amounting to $0.75 billion of a record $5.94 billion in total exports, primarily due to payment delays associated with the ongoing US sanctions. Other notable importers included Saudi Arabia (20.25%), Iraq (14.3%), and the United Arab Emirates (6.13%), together making up 60% of India’s Basmati rice exports during the 2024-25 period.
Jossan cautioned that any further escalation in the situation could have repercussions not only for exporters but also disturb the pricing and demand within the domestic Indian market. He pointed out that the cessation of India’s crude oil imports from Iran has resulted in a significant financial gap, which is directly influencing the timely payments for Basmati rice.
India has maintained its status as the largest rice exporter over the past decade, commanding a market share of approximately 35% to 40% in the global rice trade. Furthermore, the country lifted all restrictions on rice exports last year.
