India’s lucrative basmati rice exports, valued at nearly $6 billion for FY25, are facing an unprecedented threat as escalating tensions in West Asia disrupt shipping and raise logistics costs. Exporters are meeting officials from the Agricultural and Processed Food Products Export Development Authority (Apeda) this week to assess the impact and explore measures to safeguard shipments bound for the Gulf, which accounts for 60 to 70 percent of India’s basmati trade.
The disruption comes as several consignments are reportedly stalled at ports or in transit, delaying payments and raising concerns over contractual obligations if hostilities persist. Pankaj Goel, vice president of the All India Rice Exporters Association (Airea), noted that the standstill has extended even to Afghanistan, which had recently reopened to Indian basmati. Iranian importers, who placed large orders in the months preceding the conflict, have added further exposure for exporters.
Satish Goel, president of Airea, confirmed that the organization is closely monitoring the situation and coordinating with the commerce ministry to mitigate risks. Apeda, the government’s nodal export promotion body, is expected to review potential support measures, including trade facilitation and risk management strategies.
West Asia remains the backbone of India’s basmati trade. Saudi Arabia, Iraq, Iran, the UAE, and Yemen collectively account for nearly $3.53 billion of exports, representing 58.8 percent of total trade in FY25. The heavy reliance on the region makes the sector particularly vulnerable to disruptions in shipping routes or spikes in freight and insurance costs. Industry observers have drawn parallels with the 2023 Red Sea crisis, when attacks on commercial vessels forced rerouting around the Cape of Good Hope, inflating costs and transit times.
Beyond rice, the crisis is spilling over into edible oils, where rising crude prices and shipping uncertainties could increase domestic costs for sunflower and soybean oil. Sudhakar Desai, president of the Indian Vegetable Oil Producers’ Association, highlighted that the link between edible oils and the global biofuel market amplifies inflationary pressures, while logistical and insurance risks add to volatility. Analysts warn that continued disruption could reverberate across the entire supply chain, affecting millers, traders, and farmers in Punjab, Haryana, and western Uttar Pradesh during the peak export window.
Rising bunker fuel costs and vessel availability constraints have prompted exporters to avoid fresh cost, insurance, and freight contracts, further tightening margins. With the geopolitical situation in West Asia remaining unstable, market watchers expect ongoing volatility in both agricultural exports and domestic commodity prices.
Apeda, under India’s Ministry of Commerce and Industry, plays a central role in promoting agricultural exports, developing market access, certifying quality, and coordinating with government departments to support exporters during crises. Officials are actively engaged in assessing the situation, although a response from Apeda chairman Abhishek Dev was not available at press time.
