New Delhi: India’s basmati rice trade with Iran faces a new bout of uncertainty as the US threatened 25% tariffs on countries that trade with unrest-hit Tehran, a development that threatens to disrupt exports and prompted the Commerce Department to intervene. The ministry will consult with exporters to assess the impact and ensure supplies to Iran, two people familiar with the matter said. The date of the meeting has not yet been specified.
Iran is India’s third largest market for its famous basmati rice, exporting 599,000 tonnes worth $468.1 million during April-November 2025.
Exporters say the confusion over whether the duty should apply only to US-bound goods or also to India-Iran trade has made it difficult to price contracts and plan shipments, especially as India already faces a 50% US tariff on some exports from August 27, 2025.
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The ministry’s meeting will focus on understanding exporters’ concerns and discussing measures to ensure the continuity of shipments, the first of the two people cited above said.
“Basmati rice exporters are unclear about the proposed new US tariff and will meet officials of the Ministry of Commerce dealing with agricultural exports to clarify the issue,” said Satish Goel, president of the All India Rice Exporters Association (Airea).
The Agricultural and Processed Food Products Export Development Authority (Apeda) is an arm of the Ministry of Commerce that addresses the concerns of exporters through policy interventions from time to time.
Impact on business
Although Iran remains one of India’s main destinations for basmati, sanctions and tighter market restrictions have greatly affected Indian business in the country. Until now, many merchants have channeled this business through other channels
“Due to limited direct trade with Iran, we do most of our business through the UAE, where Iranian importers operate locally. This arrangement has helped us mitigate risks,” said Akshay Gupta, head of bulk exports at KRBL Ltd, a major basmati rice company that owns a number of brands including India Gate.
“However, the new US tariff (threat), including the proposed 25% levy, adds another challenge to India’s basmati rice sector,” Gupta said.
According to Aire’s Goel, nearly one-third of India’s shipments are routed through Dubai, where Iranian importers have set up their offices.
Asked about the impact of the escalating civil unrest and widespread protests in Iran on exports, Goel said, “It is too early to say anything. Basmati shipments have been suspended since last 7-8 days and we have been assured that it will resume from January 20.”
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Exporters said payment risks have increased due to ongoing unrest and communications disruptions in Iran, adding to uncertainty over tariff concerns.
“Exporters are facing delayed payments, but at this stage it is difficult to quantify the amount stuck in trade due to unrest and internet disruption,” said Pankaj Goel, vice-president of the All India Rice Exporters Association.
In Iran, nationwide protests that began in late December over dire economic conditions have escalated into the largest anti-government demonstrations since 1979. The protests have been met with a crackdown by security forces, which rights groups say have killed more than 2,500 people and led to tens of thousands of arrests amid a widespread internet outage, according to an AP report.
Constant engagement is needed
Agriculture experts say the situation calls for continued cooperation between the government and industry amid uncertainty over tariffs.
“Given the uncertainty surrounding the proposed US tariff and its scope, exporters need political guidance to avoid disrupting ongoing contracts. Consultations with the Commerce Department will be important to assess the risks and ensure the continuity of basmati rice exports,” said Binod Anand, an agriculture expert and member of the government’s Minimum Support Price Committee.
Inquiries sent to the Department of Commerce and Apeda on Jan. 14 remained unanswered as of press time.
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According to Commerce Department data, India’s total merchandise exports to Iran during April-October for the first seven months of FY26 was at USD 693 million, while imports were valued at USD 177 million.
India’s trade with Iran remains modest but steady, with exports at $1.24 billion and imports at $441.8 million in FY25. In FY24, exports were $1.22 billion and imports were $625 million.
Apart from basmati rice, India exports a number of agricultural and industrial products to Iran. In FY25, shipments included fruits and nuts ($55.91 million), tea, coffee and spices ($70 million), sugar and related confectionery ($14.5 million), organic chemicals ($29.27 million), pharmaceutical products ($28.29 million), animal feed and feed ($71 million), and personal care and cosmetics ($25 million).
