Indian Basmati Exports to Iran Hit by Tariffs and Unrest, Elevating Trade Risks

Indian Basmati rice exporters are facing fresh pressure in the Iran market as new US tariffs and domestic unrest in Iran disrupt trade, delay payments, and pull down prices in India, raising concerns for traders and farmers linked to this export segment.

The Indian Rice Exporters Federation (IREF) has reported that shipments to Tehran have slowed, as buyers hesitate to commit and financial flows remain uncertain, even though Iran stays one of the largest overseas destinations for India’s premium Basmati rice varieties.

Exports to Iran are being hit by the recent 25% US tariffs on Iran’s trading partners, combined with ongoing civil unrest within Iran, which together have raised perceived risk for trade, complicated payment routes, and weakened the appetite of importers for fresh contracts.

According to industry data, India exported around Rs 4,212.9 crore worth of Basmati rice to Iran during April-November 2025-26, representing 5.99 lakh metric tonnes, highlighting how important Iran remains in the overall Basmati export basket for Indian suppliers.

IREF data, cited by news agency ANI, shows a clear decline in domestic prices. The popular 1121 Basmati variety has eased from Rs 85 per kg to Rs 80 per kg within one week, while 1509 and 1718 varieties have fallen from Rs 70 per kg to Rs 65 per kg.

The recent price shifts in India’s wholesale markets are summarised below, reflecting the impact of slower Iranian demand and greater uncertainty over payments reaching exporters on time through regular banking or alternative settlement arrangements.

Basmati variety	Previous price (Rs/kg)	Current price (Rs/kg)
1121	85	80
1509	70	65
1718	70	65

Basmati rice exports: payment delays and contract risks

IREF has stated that exporters are dealing with late remittances, doubts about contract enforcement, and reluctance from Iranian importers to book new cargoes, as many buyers reassess credit risk and logistical feasibility under the changing geopolitical and domestic conditions.

"Iran has historically been a pillar market for Indian Basmati. However, the current internal turmoil has disrupted trade channels, slowed payments, and dented buyer confidence," Prem Garg, National President of IREF, told ANI, pointing to the seriousness of challenges confronting Indian traders.

Prem Garg further noted that several importers have informed exporters that they are unable to honour existing contracts or send payments as agreed, which has increased uncertainty for Indian companies that depend heavily on Iranian demand for specific Basmati grades.

Beyond Iran, IREF figures show that between April 1, 2024, and March 25, 2025, India exported 59.44 lakh tonnes of Basmati rice, out of total rice exports of 198.65 lakh tonnes, indicating that Basmati remains a significant share of the country’s overall rice trade.

Period	Basmati exports (lakh tonnes)	Total rice exports (lakh tonnes)
Apr 1, 2024–Mar 25, 2025	59.44	198.65
Apr–Nov 2025-26 to Iran	5.99	Value: Rs 4,212.9 crore

For finance readers assessing trade exposure, the combination of weaker prices, delayed inflows, and higher risk in a key market could influence working capital needs, credit costs, and future contract structuring for Indian Basmati rice exporters dealing with Iran-linked business.

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