INTERNATIONAL
India's rice exports to top buyer Iran stall on protests, tariff worries
US President Donald Trump's 25% tariff threat on Iran trade sparks uncertainty for Indian rice exporters amid Iran's economic crisis. - REUTERS
MUMBAI/NEW DELHI: India's basmati rice exports to Iran have slowed to a near standstill amid the protests gripping the Gulf country, with suppliers wary of new deals due to the risk of non-payment and potential additional U.S. tariffs, trade officials said.
AI Brief
U.S. President Donald Trump said on Monday that any country trading with Iran would face a 25% tariff on its commerce with the U.S., a move exporters say has made Indian suppliers even more reluctant to sign new contracts with Iranian buyers.
"The proposed 25% levy under the Trump framework adds an additional challenge to the Indian basmati rice sector," said Akshay Gupta, head of bulk exports at KRBL Ltd, a leading rice exporter.
India is Iran's largest rice supplier, with the staple accounting for nearly two-thirds of all Iranian imports from the country.
"We're worried about the payments for rice shipped in the last two months," said a New Delhi-based exporter, who declined to be named.
"In some cases, buyers report they did not receive the full quantity; in others, they have fled the country because of the ongoing protests," the exporter said.
The current protests began last month in Tehran, with shopkeepers condemning the rial currency's free fall.
Unrest has spread nationwide amid deepening distress over economic privations arising from rocketing inflation driven by mismanagement and Western sanctions, and curbs on political and social freedoms.
Importers have conveyed their inability to honour existing commitments and remit payments to India, creating heightened uncertainty for exporters, Dev Garg, vice president of the Indian Rice Exporters Federation (IREF), said in a statement.
India's Ministry of Commerce and Industry declined to comment.
Iran previously supplied foreign exchange to food importers at a subsidised rate, but it has now suspended that provision, effectively making imports much more expensive for buyers, said Vijay Setia, a top rice exporter.
India's exports to Iran, largely food items such as rice, fell to US$1.24 billion in the 2024–25 fiscal year ending March from US$3.51 billion in 2018–19, while imports declined to US$440 million from a peak of US$13.53 billion in 2018–19, Indian government data showed.
"Iran's currency has crashed, and exporters are worried whether shipments already sent will be cleared and whether buyers can pay," said Ajay Sahai, director general of the Federation of Indian Export Organisations.
Major Indian exports to Iran include basmati rice and pharmaceuticals, while imports consist mainly of fresh and dried fruits.
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AI Brief
- Trump threatens 25% tariffs on nations trading with Iran, impacting global exporters.
- Indian rice exporters face payment delays and contract cancellations due to Iran's currency crash and protests.
- India's food exports to Iran have sharply declined as importers struggle with rising costs and suspended subsidies.
U.S. President Donald Trump said on Monday that any country trading with Iran would face a 25% tariff on its commerce with the U.S., a move exporters say has made Indian suppliers even more reluctant to sign new contracts with Iranian buyers.
"The proposed 25% levy under the Trump framework adds an additional challenge to the Indian basmati rice sector," said Akshay Gupta, head of bulk exports at KRBL Ltd, a leading rice exporter.
India is Iran's largest rice supplier, with the staple accounting for nearly two-thirds of all Iranian imports from the country.
"We're worried about the payments for rice shipped in the last two months," said a New Delhi-based exporter, who declined to be named.
"In some cases, buyers report they did not receive the full quantity; in others, they have fled the country because of the ongoing protests," the exporter said.
The current protests began last month in Tehran, with shopkeepers condemning the rial currency's free fall.
Unrest has spread nationwide amid deepening distress over economic privations arising from rocketing inflation driven by mismanagement and Western sanctions, and curbs on political and social freedoms.
Importers have conveyed their inability to honour existing commitments and remit payments to India, creating heightened uncertainty for exporters, Dev Garg, vice president of the Indian Rice Exporters Federation (IREF), said in a statement.
India's Ministry of Commerce and Industry declined to comment.
Iran previously supplied foreign exchange to food importers at a subsidised rate, but it has now suspended that provision, effectively making imports much more expensive for buyers, said Vijay Setia, a top rice exporter.
India's exports to Iran, largely food items such as rice, fell to US$1.24 billion in the 2024–25 fiscal year ending March from US$3.51 billion in 2018–19, while imports declined to US$440 million from a peak of US$13.53 billion in 2018–19, Indian government data showed.
"Iran's currency has crashed, and exporters are worried whether shipments already sent will be cleared and whether buyers can pay," said Ajay Sahai, director general of the Federation of Indian Export Organisations.
Major Indian exports to Iran include basmati rice and pharmaceuticals, while imports consist mainly of fresh and dried fruits.
Your gateway to global news, insights, and stories that matter.