India’s rice export outlook is facing fresh pressure due to rising instability in Iran and a recent announcement by US President Donald Trump warning of a 25 per cent tariff on countries that continue trade with Tehran.
The development has triggered concern within India’s basmati rice export sector, which depends heavily on Iran as a major overseas market.
In a post on his social media platform Truth Social, Trump said that any country doing business with Iran would face a 25 per cent tariff on all trade with the United States.
While there is still no clarity on how and when the measure will be enforced, the statement has already unsettled exporters and traders.
According to export data, India shipped basmati rice worth $468.10 million to Iran between April and November of the 2025–26 financial year, totalling nearly 5.99 lakh metric tonnes.
Iran continues to be one of the most important destinations for Indian basmati. However, exporters say the country’s internal unrest has started affecting trade execution, delaying payments and disrupting shipment schedules.
The Indian Rice Exporters Federation (IREF) has warned that ongoing protests and instability in Iran are weighing heavily on trade flows and putting downward pressure on basmati prices in Indian mandis.
Exporters are increasingly cautious as uncertainty spreads across contracts, payment cycles and logistics planning.
“These pressures are now clearly visible in domestic markets,” IREF said, noting that prices of key basmati varieties have softened sharply due to postponed deals, cautious buying and rising risk concerns among exporters.
IREF National President Dr. Prem Garg said Iran has long been a pillar market for Indian basmati rice, but current conditions have weakened buyer confidence.
He noted that trade channels have been disrupted, payments slowed and prices in Indian markets have fallen sharply within a short period.
Dr. Garg advised exporters to reassess their exposure to Iranian contracts, strengthen payment safeguards and avoid building excess inventory aimed solely at the Iranian market.
He stressed that the federation is not raising an alarm but urging caution, as trade is often the first casualty during periods of geopolitical and internal instability.
While Iran poses immediate risks, IREF believes the impact of Trump’s tariff warning on Indian rice exports to the US may be limited.
Indian rice shipments to the US already face duties of around 50 per cent, yet export volumes have remained relatively stable.
The federation pointed out that Indian basmati is not a direct substitute for rice from other origins and remains deeply embedded in the food habits of the Indian diaspora and Gulf consumers.
The US is currently India’s 10th largest rice export market overall and the fourth-largest destination for Indian basmati. Even if tariffs rise further, IREF does not expect a sharp fall in exports to the US.
In contrast, the situation in Iran is seen as a more serious short-term risk. Exporters report that some Iranian importers are struggling to honour contracts and transfer funds, adding to uncertainty around prices, cash flows and market confidence.
To manage the risk, IREF has urged exporters to diversify into alternative markets in West Asia, Africa and Europe.
The federation said the Iran situation highlights how sensitive food exports, especially strategic commodities like rice, are to regional stability, and warned that timely caution is essential to protect farmers, exporters and the broader rice ecosystem.
