India’s rice exports in the first four months of 2026 fell marginally from a year earlier as the US-Israeli war with Iran disrupted premium basmati variety shipments to Gulf markets, two government officials said on Wednesday .
India, which accounts for more than 40% of world rice exports, typically ships more than the combined exports of the next three biggest suppliers — Thailand, Vietnam and Pakistan. Its declining exports will add to pressure on Indian prices, which have fallen more than 5% this year following a record rice harvest .
Export figures show a mixed trend
The country’s total rice exports during January to April 2026 fell 1.3% from a year ago to 8.39 million metric tons . Exports of premium basmati rice fell 7% during the period to 2.3 million metric tons, as shipments to markets including Iran declined. Non-basmati rice exports, however, edged up to 6.09 million tons from 6.03 million tons a year earlier .
In April alone, India shipped grain valued at $1.01 billion, a 6% year-on-year decline, as the conflict in the Middle East disrupted exports of aromatic long-grain basmati rice to Gulf countries including Iran and Saudi Arabia .
Shipping crisis through the Strait of Hormuz
The ongoing conflict has severely impacted shipping lanes in the Red Sea and the Strait of Hormuz. The Strait of Hormuz, just 39 km wide at its narrowest point, remains one of the world’s most critical oil and supplies trade corridors but has turned into a logistical nightmare for India .
Rice cargoes bound for Iran, Iraq, Qatar and Saudi Arabia remain delayed in transit because of the conflict, leading buyers and exporters to hold back on new deals . One exporter based in New Delhi said shipments were expected to remain below typical levels until the Iran war ends .
The crisis has led to a sharp escalation in freight costs. Ocean freight for rice exports to the Gulf region, which was only 500per25−tonnecontainerbeforetheconflict,hasincreasedto5,000 per container since March 2026, making shipments commercially unviable for many traders .
Insurance premiums for vessels transiting the Gulf have also surged, while bunker fuel costs continue rising. Exporters say the additional costs are ultimately transferred to consumers .
Iran’s critical role in basmati trade
The Middle East remains a crucial destination for India’s aromatic basmati rice, accounting for nearly 70% of total basmati exports. According to APEDA data, rice exports to major Middle Eastern markets — including Saudi Arabia, Iran, Iraq, the UAE, Kuwait, and Oman — fell by 49% in FY26 compared to the previous year .
Iran was India’s biggest market for basmati rice until last year when Saudi Arabia surpassed it. During April-December 2025, Iran alone imported premium grain worth ₹6,000 crore .
Pakistan gains strategic advantage
The crisis has created an unexpected opportunity for Pakistan. Unlike India, which is blocked by the closure of the Strait of Hormuz, Pakistan shares a 900-km land border with Iran and is now using two border crossings — Taftan and Gabd-Rimdan in Baluchistan — to move shipments via land, bypassing the Persian Gulf entirely under a barter trade arrangement for crude oil .
“Exports of basmati from India to Iran have been completely stopped due to war, and it is a direct gain for Pakistan, which is using the land routes to access the market,” said Ranjit Singh Jossan, an exporter from Punjab, who is also the vice-president of the basmati exporters association in the state .
India exports at least 6 million tonnes of basmati annually, worth approximately ₹50,000 crore, out of which nearly two-thirds go to the Middle East. With the direct movement through the Strait of Hormuz difficult, exporters are being forced to use alternative shipping routes for consignments bound for Gulf countries .
Exporters pivot to survive
The Indian Rice Exporters Federation has advised its members to avoid entering into new ‘cost, insurance and freight’ (CIF) commitments to Iran and Gulf destinations. Under CIF agreements, sellers bear the costs, insurance and freight for cargo until it reaches the buyer’s port. Instead, exporters are being urged to conclude sales on ‘free-on-board’ (FOB) terms wherever feasible, so that freight, insurance and related risks remain with international buyers .
Exporters are increasingly redirecting cargoes to West Africa, where shipping routes remain relatively stable. Several loadings have been diverted to African destinations, including Benin, helping maintain shipment momentum despite the Gulf disruption .
Outlook
With the Strait of Hormuz effectively closed and no immediate end to the West Asia crisis in sight, rice shipments are expected to remain below typical levels. The situation continues to evolve, with exporters jostling with shipping companies, freight agents, and importing nations for rates and settlements .
