Escalating civil unrest and widespread protests in Iran are beginning to disrupt India’s rice export flows to the region, triggering a sharp softening of Basmati prices in domestic markets and raising fresh concerns over payment risks and shipment delays.

According to the latest export data, India’s Basmati rice shipments to Iran between April and November 2025–26 stood at $ 468.10 million, with volumes of 5.99 lakh metric tonnes. While Iran remains one of India’s most significant Basmati destinations, exporters report increasing stress on order execution, remittances, and trade settlements amid growing instability within the country.

The impact is now visible on the ground. Over the past week, prices of key Basmati varieties have fallen sharply across major mandis, reflecting delayed contracts, buyer hesitation, and elevated risk perception among exporters.

“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,” said Dr. Prem Garg, National President, Indian Rice Exporters Federation (IREF). “The immediate fallout is evident in Indian mandis, where Basmati prices have softened sharply within days. Exporters must exercise heightened caution, particularly with respect to credit exposure and shipment timelines.”

In response, IREF has issued an advisory urging exporters to reassess risks associated with Iran-linked contracts, prioritise secured payment mechanisms, and avoid overleveraging inventories dedicated exclusively to the Iranian market.

“We are not sounding an alarm, but urging prudence,” said Dev Garg, Vice President, IREF. “During periods of geopolitical and internal instability, trade is often the first casualty. A calibrated approach is essential to protect exporters and farmers alike. India’s rice sector is resilient, but it must be safeguarded through timely intelligence and responsible trade practices.”

The Federation has also encouraged exporters to diversify shipments toward alternative markets across West Asia, Africa, and Europe to cushion the impact of any prolonged slowdown in Iran-bound trade.

IREF also took note of recent remarks by the President of the United States indicating that countries continuing trade with Iran could face a 25 per cent tariff. While food commodities are not directly targeted, exporters fear indirect consequences, including heightened compliance scrutiny, payment complications, and elevated transaction risk.

The Federation clarified that Indian rice exports to the United States are already subject to a 50 per cent tariff, sharply higher than the earlier 10 per cent. Despite this, exports have remained resilient, underpinned by strong diaspora demand and the non-substitutable nature of Indian Basmati rice.

Between April and November 2025, India exported 240,518 metric tonnes of rice to the United States, valued at USD 233.83 million. The United States currently ranks as India’s tenth-largest rice market globally and the fourth-largest destination for Indian Basmati, underscoring its strategic importance despite tariff pressures.

IREF expressed deeper concern over on-ground developments in Iran, where disruptions in local bazaars have begun to affect trade settlements. Importers have communicated difficulties in honouring commitments and remitting payments, heightening uncertainty for Indian exporters.

“Similar crises have occurred in the past, but the trajectory of the current situation remains unclear,” the Federation noted. “Further volatility in prices, liquidity, and trade sentiment cannot be ruled out in the coming weeks.”

As global food trade becomes increasingly intertwined with geopolitics, the situation in Iran underscores the vulnerability of strategic commodities such as rice to regional instability. For India’s rice ecosystem, IREF cautioned that measured restraint and disciplined risk management today may help prevent deeper distress in the months ahead.