Trump’s Iran Tariff May Hit India’s Basmati Rice Exports

Iran remains one of the largest destinations for Indian Basmati rice, accounting for a significant share of export volumes. However, the proposed tariff, which penalises third countries for trade engagement with Iran, could complicate payment mechanisms, raise transaction risks, and dampen buyer confidence at a time when the market is already under strain.

According to industry data, India’s Basmati rice exports to Iran during April–November 2025–26 stood at USD 468.10 million, with shipments totalling 5.99 lakh metric tonnes.

The Indian Rice Exporters Federation (IREF) has warned that additional geopolitical and economic pressures may further slow order flows and delay shipments, adversely impacting exporters and farmers alike. IREF has already flagged visible stress in the rice trade linked to Iran, citing internal instability and financial disruptions in the country.

Commenting on the situation, Prem Garg, National President of IREF, said Iran has historically been a pillar market for Indian Basmati, but current internal turmoil has disrupted trade channels, slowed payments, and impacted buyer confidence.

“The immediate fallout is visible in Indian mandis, where Basmati prices have softened sharply within days,” Garg said.

Trump’s tariff announcement could further amplify these challenges by discouraging international banking channels and insurers from facilitating Iran-linked transactions, even for essential commodities such as food. Exporters may be forced to reassess their exposure, particularly where shipments are based on deferred or unsecured payments.

Garg underlined the need for caution, stating, “We are not sounding an alarm, but urging prudence. In times of geopolitical and internal instability, trade becomes the first casualty. A calibrated approach is essential to protect both exporters and farmers.”

Domestic markets have already begun reflecting the impact, with Basmati prices witnessing a sharp decline amid buyer hesitation and delayed contracts. Prolonged uncertainty could pressure farm-gate prices and increase inventory holding costs if alternative markets are not activated swiftly.

IREF has advised exporters to adopt secured payment mechanisms and diversify into alternative destinations across West Asia, Africa, and Europe to cushion potential disruptions.

As geopolitical decisions increasingly shape trade outcomes, India’s rice export ecosystem faces a critical test in navigating sanctions-driven volatility while safeguarding farmer interests and export stability.