India’s rice exports may bear the brunt of escalating tensions in Iran and US President Donald Trump’s latest move to impose 25% tariffs on any country doing trade with Iran. “Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive. Thank you for your attention to this matter!,” Trump posted on social media platform Truth Social.Recent export figures show that India shipped Basmati rice worth $468.10 million to Iran during April to November of 2025–26, which is 5.99 lakh metric tonnes. Despite Iran remaining one of the most important overseas markets for Indian Basmati, the ongoing instability has increasingly strained order execution, delayed remittances and unsettled delivery schedules in the current fiscal year, according to Indian Rice Exporters Federation (IREF).
Trump tariffs & Iran tensions: What’s ahead for India’s rice exports?
Rising internal turmoil and large-scale demonstrations in Iran are starting to weigh on India’s rice export outlook to the country, disrupting trade flows and exerting downward pressure on basmati prices at home, says IREF. The uncertainty has spread across the export chain, affecting contracting, payments and shipment planning.These pressures are now clearly reflected in domestic markets. Prices of major basmati varieties have fallen sharply over the past week, driven by cautious buying, postponed deals and growing risk aversion among exporters.
India’s Rice Exports to US
Dr. Prem Garg, National President, Indian Rice Exporters Federation (IREF), said: “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. 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.”Dr. Garg noted that IREF has advised exporters to re-evaluate the risks tied to Iranian contracts, strengthen payment safeguards and refrain from excessive inventory build-up aimed solely at the Iran market. “We are not sounding an alarm, but urging prudence. In periods of geopolitical and internal instability, trade is often the first casualty. A calibrated approach is essential to protect both exporters and farmers. India’s rice sector is resilient, but it must be safeguarded through timely intelligence and responsible trade practices,” he said.The federation has also urged industry participants to expand their presence in alternative destinations across West Asia, Africa and Europe to mitigate the impact of any extended slowdown in shipments to Iran.Talking about Trump’s announcement of 25% tariffs, IREF pointed out that Indian rice shipments to the US are already levied with a 50% duty, which is a steep jump from the earlier tariff rate of 10%.“Despite this substantial tariff escalation, Indian rice exports to the U.S. have not witnessed a corresponding decline in volume. This resilience is largely due to the fact that Indian rice—particularly Basmati—is not a like-for-like substitute for rice of Pakistani or U.S. origin. Additionally, Indian rice is deeply embedded in the culinary traditions of the Gulf region and the Indian subcontinent diaspora, ensuring sustained consumer demand despite price pressures,” says IREF.
India-Iran Trade Overview
There is currently little certainty on how the proposed 25% tariff would be implemented. Even in a scenario where the overall tariff load increases further, IREF does not anticipate a big drop in Indian rice shipments to the US. “The United States remains the 10th largest market for Indian rice globally and the fourth largest destination for Indian Basmati, underscoring its strategic importance,” IREF said.In contrast, IREF flagged more serious risks emerging from Iran, where disruptions at the local market level have started to interfere with trade payments. Exporters have been informed by importers that they are struggling to meet contractual obligations and transfer funds to India, injecting a high degree of uncertainty into ongoing transactions. Although such episodes have been witnessed earlier, the direction and duration of the current disruption remain uncertain and are likely to trigger additional volatility in prices, cash flows, and overall market confidence in the near term.“As global trade becomes increasingly intertwined with geopolitics, the situation in Iran serves as a reminder that food exports—particularly strategic commodities such as rice—are highly sensitive to regional stability. For India’s rice ecosystem, timely caution today may help prevent deeper distress tomorrow,” IREF concludes.
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