Why Is 1 Lakh Tonne Of Indian Basmati Rice Stranded

The ongoing conflict between Iran and Israel has led to significant disruptions in shipments of Indian basmati rice, with around 100,000 tonnes stranded at Gujarat ports. This situation, affecting a substantial portion of India’s basmati exports to Iran, has raised concerns among exporters regarding financial losses and trade instability.

In the latest fallout of the escalating Iran-Israel conflict, approximately 100,000 tonnes of Indian basmati rice bound for Iran are stranded at ports in Gujarat, triggering concern among exporters and agricultural trade bodies. The disruption affects nearly one-fifth of India’s total basmati exports to Iran, raising alarm over financial losses and trade uncertainty in a volatile geopolitical environment.

Kandla and Mundra Ports Choke Amid Shipping Paralysis

According to the All India Rice Exporters Association (AIREA), the bulk of the affected consignments are stationed at Kandla and Mundra ports, two of India’s key gateways for agro-export logistics. The disruption has occurred as shipping lines and insurers have suspended services to Iran, fearing liability exposure amidst intensifying military action across the Middle East.

“Standard shipping insurance policies exclude conflict zones, and in the current scenario, no coverage is available for Iran-bound vessels,” AIREA President Satish Goyal told PTI. “This has made it impossible for us to move the consignments forward.” India exported around 1 million tonnes of basmati rice to Iran in FY 2024–25, making it the second-largest importer of Indian aromatic rice after Saudi Arabia.

The current blockade of 100,000 tonnes represents a crippling 18–20 per cent of that trade volume. Total basmati rice exports from India in FY25 reached approximately 6 million tonnes, with the Middle East and West Asia accounting for the lion’s share. Other significant buyers include Iraq, the UAE, and the United States. However, Iran’s unique dependence on Indian basmati—favoured for its aroma and grain quality—has long made it a key trade partner despite sanctions-related payment difficulties and currency constraints.

Exporters Face Financial Crunch as Domestic Prices Drop

The trade impasse is already impacting domestic prices, with basmati rice rates falling by ₹4–5 per kg, according to Goyal. This decline is attributed to a glut in supply caused by the stranded cargo, as well as anxiety over future orders amid ongoing uncertainty.

Exporters warn that the inability to ship and realise payments could soon lead to a liquidity crisis for hundreds of small- and mid-sized firms that dominate India’s agri-export sector. “Exporters have made purchases from farmers, paid for packaging, freight, and port storage—every day of delay bleeds us financially,” a rice trader from Karnal told TOI on condition of anonymity. “We are stuck in the middle of a geopolitical war with no fault of our own.”

Industry in Dialogue with Government

AIREA has reached out to the Agricultural and Processed Food Products Export Development Authority (APEDA) and is set to meet Union Commerce and Industry Minister Piyush Goyal on June 30 to seek intervention.

Exporters are expected to request:

Diplomatic engagement to open humanitarian trade corridors.
Government-backed insurance or risk coverage schemes.
Temporary financial relief or credit extensions to ease liquidity stress.

India’s Commerce Ministry has not yet issued an official statement, but officials say they are monitoring the situation closely.

Broader Trade and Strategic Implications

The Israel-Iran conflict has already seen intensified military strikes and US involvement, raising fears about the potential closure of the Strait of Hormuz, through which nearly 20 per cent of global oil flows. While India’s primary concern has been energy supply security, this latest incident highlights the vulnerability of India’s export sectors to geopolitical disruptions.

Iran, already reeling from international sanctions, remains a volatile but vital partner for Indian exporters—not just for rice but also for pharmaceuticals, tea, steel, and engineering goods. However, currency volatility, delayed remittances, and banking restrictions have always complicated trade, even in peacetime.

The current conflict only amplifies these pre-existing risks.

Conclusion: A Crisis Beyond Borders

The stranding of 100,000 tonnes of basmati rice is not merely a trade bottleneck—it is a symbol of how deeply interconnected global politics and local economies have become. For India, which is positioning itself as a global agricultural powerhouse, the episode serves as a stark reminder that export growth is hostage to international stability.

As negotiations continue behind closed doors, exporters across India’s rice belts in Punjab, Haryana, and western Uttar Pradesh wait anxiously—uncertain whether their prized grain will ever reach Iranian tables, or rot away in containers under a burning subcontinental sun.

news currency : Times now news

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